REDWOOD TRUST INC (RWT) Stock Fundamental Analysis
NYSE:RWT - New York Stock Exchange, Inc. - US7580754023 - REIT - Currency: USD
Taking everything into account, RWT scores 4 out of 10 in our fundamental rating. RWT was compared to 66 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. RWT has a bad profitability rating. Also its financial health evaluation is rather negative. RWT is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
In the past year RWT was profitable.
RWT had a negative operating cash flow in the past year.
In multiple years RWT reported negative net income over the last 5 years.
In the past 5 years RWT always reported negative operating cash flow.
1.2 Ratios
RWT's Return On Assets of 0.14% is on the low side compared to the rest of the industry. RWT is outperformed by 60.61% of its industry peers.
Looking at the Return On Equity, with a value of 2.38%, RWT is in line with its industry, outperforming 42.42% of the companies in the same industry.
RWT has a Return On Invested Capital of 0.45%. This is comparable to the rest of the industry: RWT outperforms 59.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.14% | ||
| ROE | 2.38% | ||
| ROIC | 0.45% |
ROA(3y)-0.38%
ROA(5y)-0.94%
ROE(3y)-4.33%
ROE(5y)-8.65%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With a Profit Margin value of 2.65%, RWT perfoms like the industry average, outperforming 40.91% of the companies in the same industry.
In the last couple of years the Profit Margin of RWT has declined.
RWT has a Operating Margin (11.23%) which is in line with its industry peers.
In the last couple of years the Operating Margin of RWT has declined.
The Gross Margin of RWT (12.41%) is worse than 71.21% of its industry peers.
RWT's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.23% | ||
| PM (TTM) | 2.65% | ||
| GM | 12.41% |
OM growth 3Y-34.74%
OM growth 5Y-12.48%
PM growth 3Y-56.86%
PM growth 5Y-30.4%
GM growth 3Y-21.34%
GM growth 5Y-11.34%
2. Health
2.1 Basic Checks
RWT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for RWT has been increased compared to 1 year ago.
Compared to 5 years ago, RWT has more shares outstanding
The debt/assets ratio for RWT is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.08, we must say that RWT is in the distress zone and has some risk of bankruptcy.
With a decent Altman-Z score value of 0.08, RWT is doing good in the industry, outperforming 68.18% of the companies in the same industry.
A Debt/Equity ratio of 15.39 is on the high side and indicates that RWT has dependencies on debt financing.
With a Debt to Equity ratio value of 15.39, RWT is not doing good in the industry: 95.45% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 15.39 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.08 |
ROIC/WACC0.1
WACC4.65%
2.3 Liquidity
A Current Ratio of 0.21 indicates that RWT may have some problems paying its short term obligations.
RWT's Current ratio of 0.21 is in line compared to the rest of the industry. RWT outperforms 59.09% of its industry peers.
RWT has a Quick Ratio of 0.21. This is a bad value and indicates that RWT is not financially healthy enough and could expect problems in meeting its short term obligations.
RWT has a Quick ratio (0.21) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.21 | ||
| Quick Ratio | 0.21 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 163.64% over the past year.
RWT shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -19.83% yearly.
RWT shows a strong growth in Revenue. In the last year, the Revenue has grown by 33.51%.
The Revenue has been growing by 9.67% on average over the past years. This is quite good.
EPS 1Y (TTM)163.64%
EPS 3Y-39.69%
EPS 5Y-19.83%
EPS Q2Q%75%
Revenue 1Y (TTM)33.51%
Revenue growth 3Y19.75%
Revenue growth 5Y9.67%
Sales Q2Q%16.25%
3.2 Future
Based on estimates for the next years, RWT will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.65% on average per year.
RWT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.46% yearly.
EPS Next Y36.45%
EPS Next 2Y30.95%
EPS Next 3Y18.65%
EPS Next 5YN/A
Revenue Next Year23.43%
Revenue Next 2Y12.99%
Revenue Next 3Y9.46%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 10.36, the valuation of RWT can be described as very reasonable.
69.70% of the companies in the same industry are more expensive than RWT, based on the Price/Earnings ratio.
RWT is valuated cheaply when we compare the Price/Earnings ratio to 27.41, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 6.74, the valuation of RWT can be described as very cheap.
Based on the Price/Forward Earnings ratio, RWT is valued cheaply inside the industry as 86.36% of the companies are valued more expensively.
RWT is valuated cheaply when we compare the Price/Forward Earnings ratio to 35.19, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.36 | ||
| Fwd PE | 6.74 |
4.2 Price Multiples
RWT's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. RWT is cheaper than 77.27% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 129.69 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
RWT's earnings are expected to grow with 18.65% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.28
PEG (5Y)N/A
EPS Next 2Y30.95%
EPS Next 3Y18.65%
5. Dividend
5.1 Amount
RWT has a Yearly Dividend Yield of 11.79%, which is a nice return.
RWT's Dividend Yield is comparable with the industry average which is at 11.56.
Compared to an average S&P500 Dividend Yield of 2.35, RWT pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 11.79% |
5.2 History
The dividend of RWT decreases each year by -10.27%.
RWT has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-10.27%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
366.90% of the earnings are spent on dividend by RWT. This is not a sustainable payout ratio.
DP366.9%
EPS Next 2Y30.95%
EPS Next 3Y18.65%
6.01
-0.01 (-0.17%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners75.58%
Inst Owner Change0%
Ins Owners1.32%
Ins Owner Change3.43%
Market Cap800.05M
Analysts75.38
Price Target7.52 (25.12%)
Short Float %3.12%
Short Ratio4.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 11.79% |
Yearly Dividend0.76
Dividend Growth(5Y)-10.27%
DP366.9%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-19.37%
Min EPS beat(2)-21.87%
Max EPS beat(2)-16.87%
EPS beat(4)1
Avg EPS beat(4)-3.9%
Min EPS beat(4)-21.87%
Max EPS beat(4)26.06%
EPS beat(8)1
Avg EPS beat(8)-29.49%
EPS beat(12)1
Avg EPS beat(12)-88.33%
EPS beat(16)4
Avg EPS beat(16)-56.27%
Revenue beat(2)0
Avg Revenue beat(2)-3.56%
Min Revenue beat(2)-4.75%
Max Revenue beat(2)-2.38%
Revenue beat(4)0
Avg Revenue beat(4)-9.19%
Min Revenue beat(4)-15.25%
Max Revenue beat(4)-2.38%
Revenue beat(8)1
Avg Revenue beat(8)-14.45%
Revenue beat(12)4
Avg Revenue beat(12)66.19%
Revenue beat(16)8
Avg Revenue beat(16)168.39%
PT rev (1m)0%
PT rev (3m)-8.13%
EPS NQ rev (1m)0.7%
EPS NQ rev (3m)-1.65%
EPS NY rev (1m)-0.88%
EPS NY rev (3m)-8.55%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.14%
Revenue NY rev (1m)0%
Revenue NY rev (3m)9.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.36 | ||
| Fwd PE | 6.74 | ||
| P/S | 0.75 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.68 | ||
| P/tB | 0.7 | ||
| EV/EBITDA | 129.69 |
EPS(TTM)0.58
EY9.65%
EPS(NY)0.89
Fwd EY14.84%
FCF(TTM)-51.54
FCFYN/A
OCF(TTM)-51.54
OCFYN/A
SpS7.98
BVpS8.89
TBVpS8.59
PEG (NY)0.28
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.14% | ||
| ROE | 2.38% | ||
| ROCE | 0.67% | ||
| ROIC | 0.45% | ||
| ROICexc | 0.46% | ||
| ROICexgc | 0.46% | ||
| OM | 11.23% | ||
| PM (TTM) | 2.65% | ||
| GM | 12.41% | ||
| FCFM | N/A |
ROA(3y)-0.38%
ROA(5y)-0.94%
ROE(3y)-4.33%
ROE(5y)-8.65%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-27.55%
ROICexcg growth 5Y-4.26%
ROICexc growth 3Y-27.68%
ROICexc growth 5Y-4.1%
OM growth 3Y-34.74%
OM growth 5Y-12.48%
PM growth 3Y-56.86%
PM growth 5Y-30.4%
GM growth 3Y-21.34%
GM growth 5Y-11.34%
F-Score3
Asset Turnover0.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 15.39 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 139.66 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 0.14 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.21 | ||
| Quick Ratio | 0.21 | ||
| Altman-Z | 0.08 |
F-Score3
WACC4.65%
ROIC/WACC0.1
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)163.64%
EPS 3Y-39.69%
EPS 5Y-19.83%
EPS Q2Q%75%
EPS Next Y36.45%
EPS Next 2Y30.95%
EPS Next 3Y18.65%
EPS Next 5YN/A
Revenue 1Y (TTM)33.51%
Revenue growth 3Y19.75%
Revenue growth 5Y9.67%
Sales Q2Q%16.25%
Revenue Next Year23.43%
Revenue Next 2Y12.99%
Revenue Next 3Y9.46%
Revenue Next 5YN/A
EBIT growth 1Y103.86%
EBIT growth 3Y-21.85%
EBIT growth 5Y-4.01%
EBIT Next Year-2.46%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-2795.34%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-2795.34%
OCF growth 3YN/A
OCF growth 5YN/A