Fintel reports that on December 6, 2023, UBS initiated coverage of Redwood Trust (NYSE:RWT) with a Buy recommendation.
Analyst Price Forecast Suggests 20.70% Upside
As of November 27, 2023, the average one-year price target for Redwood Trust is 8.61. The forecasts range from a low of 7.58 to a high of $10.50. The average price target represents an increase of 20.70% from its latest reported closing price of 7.13.
See our leaderboard of companies with the largest price target upside.
The projected annual revenue for Redwood Trust is 159MM, an increase of 82.67%. The projected annual non-GAAP EPS is 0.92.
Redwood Trust Declares $0.16 Dividend
On September 12, 2023 the company declared a regular quarterly dividend of $0.16 per share ($0.64 annualized). Shareholders of record as of September 22, 2023 received the payment on September 29, 2023. Previously, the company paid $0.16 per share.
At the current share price of $7.13 / share, the stock's dividend yield is 8.98%.
Looking back five years and taking a sample every week, the average dividend yield has been 10.87%, the lowest has been 5.51%, and the highest has been 46.21%. The standard deviation of yields is 6.07 (n=236).
The current dividend yield is 0.31 standard deviations below the historical average.
Additionally, the company's dividend payout ratio is -1.12. The payout ratio tells us how much of a company's income is paid out in dividends. A payout ratio of one (1.0) means 100% of the company's income is paid in a dividend. A payout ratio greater than one means the company is dipping into savings in order to maintain its dividend - not a healthy situation. Companies with few growth prospects are expected to pay out most of their income in dividends, which typically means a payout ratio between 0.5 and 1.0. Companies with good growth prospects are expected to retain some earnings in order to invest in those growth prospects, which translates to a payout ratio of zero to 0.5.
The company's 3-Year dividend growth rate is -0.50%.
What is the Fund Sentiment?
There are 425 funds or institutions reporting positions in Redwood Trust. This is an increase of 15 owner(s) or 3.66% in the last quarter. Average portfolio weight of all funds dedicated to RWT is 0.13%, an increase of 57.60%. Total shares owned by institutions increased in the last three months by 12.44% to 103,862K shares. 
The put/call ratio of RWT is 4.66, indicating a bearish outlook.
What are Other Shareholders Doing?
IJR - iShares Core S&P Small-Cap ETF holds 7,711K shares representing 6.50% ownership of the company. In it's prior filing, the firm reported owning 7,995K shares, representing a decrease of 3.69%. The firm increased its portfolio allocation in RWT by 11.99% over the last quarter.
Wellington Management Group Llp holds 4,279K shares representing 3.61% ownership of the company. In it's prior filing, the firm reported owning 1,373K shares, representing an increase of 67.91%. The firm increased its portfolio allocation in RWT by 268.96% over the last quarter.
Adage Capital Partners Gp, L.l.c. holds 3,777K shares representing 3.18% ownership of the company. In it's prior filing, the firm reported owning 3,268K shares, representing an increase of 13.49%. The firm increased its portfolio allocation in RWT by 35.04% over the last quarter.
VTSMX - Vanguard Total Stock Market Index Fund Investor Shares holds 3,489K shares representing 2.94% ownership of the company. In it's prior filing, the firm reported owning 3,522K shares, representing a decrease of 0.95%. The firm increased its portfolio allocation in RWT by 15.09% over the last quarter.
NAESX - Vanguard Small-Cap Index Fund Investor Shares holds 2,934K shares representing 2.47% ownership of the company. In it's prior filing, the firm reported owning 2,944K shares, representing a decrease of 0.33%. The firm increased its portfolio allocation in RWT by 16.97% over the last quarter.
Redwood Trust Background Information
(This description is provided by the company.)
Redwood Trust, Inc. is a specialty finance company focused on several distinct areas of housing credit. Our operating platforms occupy a unique position in the housing finance value chain, providing liquidity to growing segments of the U.S. housing market not served by government programs. The Compoany delivers customized housing credit investments to a diverse mix of investors, through our best-in-class securitization platforms; whole-loan distribution activities; and its publicly-traded shares. Its consolidated investment portfolio has evolved to incorporate a diverse mix of residential, business purpose and multifamily investments. Redwood Trust goal is to provide attractive returns to shareholders through a stable and growing stream of earnings and dividends, capital appreciation, and a commitment to technological innovation that facilitates risk-minded scale. Since going public in 1994, Redwood Trust has managed its business through several cycles, built a track record of innovation, and a best-in-class reputation for service and a common-sense approach to credit investing. Redwood Trust is internally managed and structured as a real estate investment trust ('REIT') for tax purposes.
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