Brad Thomas
Founder & Lead Analyst of Wide Moat Research
Starwood Property Trust's uncovered dividend needs earnings growth to escape sucker-yield status, with the market increasingly worried about a cut. A 16% yield comes with a 130% payout ratio; its net-lease business is not growing and most staff are gone. If analysts' 28% EPS rebound estimate for 2027 holds, the payout ratio could fall to 102%. CEO Barry Sternlicht may be able to pull it off. x.com x.com x.com x.comÂ
Starwood Property Trust's acquisition of Fundamental looks disastrous in retrospect, as Starwood pays out NAV while not earning its dividend. General pressure on rates and spreads adds to the damage after the stock was clobbered. The open question is when it becomes a buy, and whether it falls to Covid-era levels below $10 soon. x.comÂ
Coca-Cola's retained earnings do little for shareholders when management does not distribute much of the growth. At 27 times earnings, a 2.3% yield with no expected large dividend hikes, special dividend or meaningful buybacks makes look-through earnings a poor basis for the price: EPS rose about $1 in five years while dividends rose only 52 cents. x.com x.com x.com x.comÂ
Starwood Property Trust looks like a buy because most of its loans are floating rate and its servicing unit alone is immensely valuable and countercyclical. x.com x.comÂ
High Treasury yields keep US real-estate stocks from being a buy yet, despite a record low against the S&P 500. Each hike pushes the sector lower; the 10-year yield above 5% argues for waiting rather than assuming rotation is inevitable. A turn likely needs falling rates, perhaps a first cut or the 10-year back below 4%. x.com x.com x.com x.com x.com x.com x.com x.com x.com x.comÂ
Nike's dividend will have to be cut unless earnings double in a quick turnaround, because earnings now run below the payout. As @valuemaverick1 notes, Nike has the cash to sustain the dividend, but it does not earn it, so it should not be hiking it; that shows the Dividend Aristocrat label is worthless and the dividend a manipulated signal. Long extremely mispriced, the stock is still adjusting to new realities. The only reason to own Nike would be improving free cash flow and earnings. x.com … Show more
As the AI infrastructure crash takes form, its recessionary effect suppresses bond issuance and powerfully caps yields, giving battered housing, mortgage and related stocks a lift. Starwood Property Trust, Rocket Companies and Builders FirstSource should get a powerful boost as yields fall, with huge short covering and fundamental improvement; many in the group trade well below book value. x.com x.com x.comÂ
Arbor Realty Trust's upsized $325M convertible notes offering is a material financing with bearish dilution risk. That makes the stock more useful as a risk or short-watch name than as a long. x.comÂ