Redwood Trust (NYSE: RWT) is one of 35 publicly-traded companies in the “Mortgage REITs” industry, but how does it weigh in compared to its competitors? We will compare Redwood Trust to similar businesses based on the strength of its risk, earnings, analyst recommendations, dividends, valuation, profitability and institutional ownership.
Valuation & Earnings
This table compares Redwood Trust and its competitors gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Redwood Trust||$215.70 million||N/A||8.98|
|Redwood Trust Competitors||N/A||N/A||6.65|
Redwood Trust is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.
This is a breakdown of recent ratings and recommmendations for Redwood Trust and its competitors, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Redwood Trust Competitors||116||843||838||32||2.43|
As a group, “Mortgage REITs” companies have a potential upside of 5.62%. Given Redwood Trust’s competitors higher possible upside, analysts clearly believe Redwood Trust has less favorable growth aspects than its competitors.
Redwood Trust pays an annual dividend of $1.12 per share and has a dividend yield of 7.1%. Redwood Trust pays out 64.0% of its earnings in the form of a dividend. As a group, “Mortgage REITs” companies pay a dividend yield of 10.4% and pay out 82.8% of their earnings in the form of a dividend.
This table compares Redwood Trust and its competitors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Redwood Trust Competitors||50.53%||9.77%||2.53%|
Risk & Volatility
Redwood Trust has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, Redwood Trust’s competitors have a beta of 0.69, indicating that their average share price is 31% less volatile than the S&P 500.
Institutional & Insider Ownership
84.1% of Redwood Trust shares are held by institutional investors. Comparatively, 57.0% of shares of all “Mortgage REITs” companies are held by institutional investors. 2.3% of Redwood Trust shares are held by company insiders. Comparatively, 3.2% of shares of all “Mortgage REITs” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Redwood Trust beats its competitors on 6 of the 11 factors compared.
Redwood Trust Company Profile
Redwood Trust, Inc., through its subsidiaries, focuses on investing in mortgage and other real estate related assets. The Company is engaged in mortgage banking activities. The Company operates through three segments: Residential Investments, Residential Mortgage Banking and Commercial. The Residential Investments segment includes a portfolio of investments in residential mortgage-backed securities (RMBS) retained from its Sequoia securitizations. The Residential Mortgage Banking segment consists of operating a mortgage loan conduit that acquires residential loans from third-party originators for subsequent sale, securitization, or transfer to its investment portfolio. Its Commercial segment consists of investments in multi-family securities and commercial mortgage-backed securities, as well as a remaining commercial loan investment following the sale of the remainder of its commercial mezzanine loan portfolio.
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