Starwood Property Trust (STWD) stock forms a bullish chart pattern

May 20, 2024 09:02 PM PDT | By Invezz

Starwood Property Trust

Starwood Property Trust is a leading REIT that originates, acquires, finances, and manages mortgage loans in the US, Europe, and Australia. It has four key segments, including commercial and residential lending, infrastructure lending, real estate property, and real estate investing and servicing.

Starwood Property Trust has come into the spotlight as investors focused on the happenings in the company’s SREIT, which has been shedding assets recently. A report by WSJ noted that the company has three options to maintain its liquidity. It can raise additional cash in a high-interest-rate environment, sell assets, or limit withdrawals.

While STWD and SREIT are offered by the same company, they are different entities, and their performance is not related. Sreit is different in that it raised over $13 billion from investors, which it used to buy $25 billion in real estate. The challenge is that these are highly illiquid investments and it is always difficult to convert them into cash.

The most recent financial results showed that Starwood Property Trust’s net income came in at $154.3 million while its distributable earnings was $191.6 million. Its total revenue came in at $523 million, most of them coming from interest from loans. Its total assets jumped to over $66 billion.

Starwood Property Trust yields about 9.26%, which is much higher than most REITs, US stocks, and government bonds. The 10-year government bonds are yielding less than 6%. It has a payout ratio of 89.30%, which is slightly lower than most REITs.

Starwood has paid over $7.2 billion in dividends since its inception, has a strong balance sheet, and has ample resources to fund growth. It has a capacity of $9.7 billion, with $1.5 billion in current liquidity.

Starwood Property Trust stock analysis

STWD chart by TradingView

Turning to the weekly chart, we see that the STWD share price has done well in the past few months. It has jumped from $14.20 in March 2023 to about $20. The stock has formed an inverse head and shoulders pattern and is now sitting at its neckline.

It has remained above the 50-week and 100-week Exponential Moving Averages (EMA), which formed a bullish crossover in January. Therefore, the outlook for the stock is bullish, with the next point to watch being at $25.

Still, while Starwood Property Trust stock could rebound, I believe that popular US indices like the S&P 500 and Nasdaq 100 are better investments. For example, the fund’s total return in the past decade stood at 110.4% while the SPY and QQQ ETFs have soared by over 180% and 418%, respectively.

The post Starwood Property Trust (STWD) stock forms a bullish chart pattern appeared first on Invezz

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations, and video (Content) is a service of Kalkine Media LLC., having Delaware File No. 4697309 (“Kalkine Media, we or us”) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.