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Why I Just Doubled Down Again On This 8.9% Yielding Commercial Mortgage REIT

Published Thu, 12 Oct 2017 13:41:17 -0400 on Seeking Alpha

Starwood Property Trust (STWD) is a 'Strong Buy' at today's price point. The commercial mortgage REIT makes a compelling value proposition based on its high-quality core earnings and consistent excess dividend coverage. What's more, I think there is a chance that Starwood Property Trust will be able to increase its dividend payout as interest rates rise. I consider Starwood Property Trust to be lowly valued on a run-rate core earnings basis, and the entry yield of 8.9 percent is very appealing, too.
Starwood Property Trust's shares have not done a lot for shareholders this year (besides paying a dividend that is). Starwood's shares have dropped 1.1 percent year-to-date and slipped 5.7 percent from their latest 52-week high @$23.01. As a matter of fact, Starwood Property Trust's shares have been in a narrow trading range for a couple of months now.

Source: StockCharts.com
Starwood Property Trust's Dividend Is (Relatively) Safe The number one reason why income and even DGI investors may want to consider Starwood Property Trust is because the commercial mortgage REIT has high-quality core earnings with a low degree of volatility that have covered the company's dividend consistently.
As income investors we want to be sure that our investments will continue to pay a dividend next months, or next quarter. While there is no guarantee, of course, that a company will pay the same dividend in the future, strong dividend coverage stats... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
STARWOOD PROPERTY TRUST 20.25   12.3 1.65 1.92 9.49


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