Published Mon, 16 Apr 2018 08:22:45 -0400 on Seeking Alpha
One of the best companies to buy for a high-quality income portfolio is Starwood Property Trust, Inc. (STWD), in my opinion. The commercial mortgage REIT benefits from strong demand for loan originations, and the lending business has significant interest rate upside. Starwood Property Trust is moderately valued on a run-rate core earnings basis. I recommend investors to add the REIT on major dips as the dividend has proven to be sustainable. An investment in Starwood Property Trust yields 9.2 percent.
Starwood Property Trust - Business Overview Starwood Property Trust is the largest commercial mortgage REIT in the United States with an equity value of $5.4 billion. Starwood Property Trust runs three major business segments: Lending, Investing & Servicing, Property and it invests in everything from first mortgage loans to CMBS.
Here's a portfolio snapshot.
Source: Starwood Property Trust Investor Relations
By far the biggest segment - both in terms of assets and core earnings contribution - is the lending business. The lending business consolidates 64 percent of assets and contributes just a little bit less than half (48 percent) of Starwood Property Trust's core earnings.
Source: Starwood Property Trust
The lending business largely contains investments in first mortgage loans, 73 percent, while mezzanine loans account for 7 percent of assets. First mortgage loans are primarily variable rate, setting Starwood Property Trust up for net... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|STARWOOD PROPERTY TRUST||21.66||14.8||1.46||1.92||8.84|
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