REDWOOD TRUST INC (RWT)
US7580754023 - REIT
We assign a fundamental rating of 3 out of 10 to RWT. RWT was compared to 64 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. RWT may be in some trouble as it scores bad on both profitability and health. RWT is not overvalued while it is showing excellent growth. This is an interesting combination.
1. Profitability
1.1 Basic Checks
In the past year RWT was profitable.
In the past year RWT has reported a negative cash flow from operations.
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
The Return On Assets of RWT (0.08%) is comparable to the rest of the industry.
The Return On Equity of RWT (1.01%) is comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 0.31%, RWT is in line with its industry, outperforming 48.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.08% | ||
| ROE | 1.01% | ||
| ROIC | 0.31% |
ROA(3y)0.24%
ROA(5y)-0.8%
ROE(3y)1.91%
ROE(5y)-7.56%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 1.56%, RWT is in line with its industry, outperforming 40.63% of the companies in the same industry.
RWT's Operating Margin of 7.31% is in line compared to the rest of the industry. RWT outperforms 42.19% of its industry peers.
In the last couple of years the Operating Margin of RWT has declined.
RWT has a Gross Margin of 15.12%. This is in the lower half of the industry: RWT underperforms 73.44% of its industry peers.
In the last couple of years the Gross Margin of RWT has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.31% | ||
| PM (TTM) | 1.56% | ||
| GM | 15.12% |
OM growth 3Y-20.37%
OM growth 5Y-28.64%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-11.65%
GM growth 5Y-16.54%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so RWT is destroying value.
The number of shares outstanding for RWT has been increased compared to 1 year ago.
RWT has more shares outstanding than it did 5 years ago.
The debt/assets ratio for RWT has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.14, we must say that RWT is in the distress zone and has some risk of bankruptcy.
With a decent Altman-Z score value of 0.14, RWT is doing good in the industry, outperforming 65.63% of the companies in the same industry.
RWT has a Debt/Equity ratio of 11.10. This is a high value indicating a heavy dependency on external financing.
RWT has a worse Debt to Equity ratio (11.10) than 93.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 11.1 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.14 |
ROIC/WACC0.07
WACC4.73%
2.3 Liquidity
A Current Ratio of 0.29 indicates that RWT may have some problems paying its short term obligations.
RWT has a Current ratio (0.29) which is in line with its industry peers.
A Quick Ratio of 0.29 indicates that RWT may have some problems paying its short term obligations.
RWT has a Quick ratio (0.29) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.29 | ||
| Quick Ratio | 0.29 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 123.66% over the past year.
The earnings per share for RWT have been decreasing by -38.30% on average. This is quite bad
RWT shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.04%.
RWT shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.94% yearly.
EPS 1Y (TTM)123.66%
EPS 3Y-57.4%
EPS 5Y-38.3%
EPS Q2Q%300%
Revenue 1Y (TTM)14.04%
Revenue growth 3Y9.92%
Revenue growth 5Y14.94%
Sales Q2Q%-7.69%
3.2 Future
The Earnings Per Share is expected to grow by 81.60% on average over the next years. This is a very strong growth
Based on estimates for the next years, RWT will show a very strong growth in Revenue. The Revenue will grow by 33.53% on average per year.
EPS Next Y231.05%
EPS Next 2Y110.7%
EPS Next 3Y81.6%
EPS Next 5YN/A
Revenue Next Year12.37%
Revenue Next 2Y16.83%
Revenue Next 3Y33.53%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 33.64 indicates a quite expensive valuation of RWT.
RWT's Price/Earnings ratio is a bit more expensive when compared to the industry. RWT is more expensive than 62.50% of the companies in the same industry.
When comparing the Price/Earnings ratio of RWT to the average of the S&P500 Index (24.41), we can say RWT is valued slightly more expensively.
A Price/Forward Earnings ratio of 10.42 indicates a reasonable valuation of RWT.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RWT is on the same level as its industry peers.
RWT is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.59, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.64 | ||
| Fwd PE | 10.42 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RWT indicates a somewhat cheap valuation: RWT is cheaper than 73.44% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 179.05 |
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.
A more expensive valuation may be justified as RWT's earnings are expected to grow with 81.60% in the coming years.
PEG (NY)0.15
PEG (5Y)N/A
EPS Next 2Y110.7%
EPS Next 3Y81.6%
5. Dividend
5.1 Amount
RWT has a Yearly Dividend Yield of 8.59%, which is a nice return.
With a Dividend Yield of 8.59, RWT pays less dividend than the industry average, which is at 12.46. 93.75% of the companies listed in the same industry pay a better dividend than RWT!
Compared to an average S&P500 Dividend Yield of 2.30, RWT pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.59% |
5.2 History
The dividend of RWT decreases each year by -8.56%.
RWT has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-8.56%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
724.69% of the earnings are spent on dividend by RWT. This is not a sustainable payout ratio.
DP724.69%
EPS Next 2Y110.7%
EPS Next 3Y81.6%
REDWOOD TRUST INC
NYSE:RWT (7/26/2024, 7:04:00 PM)
After market: 7.4 0 (0%)7.4
+0.1 (+1.37%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap977.91M
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.59% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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PT rev (1m)
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EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.64 | ||
| Fwd PE | 10.42 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.15
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.08% | ||
| ROE | 1.01% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 7.31% | ||
| PM (TTM) | 1.56% | ||
| GM | 15.12% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 11.1 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.29 | ||
| Quick Ratio | 0.29 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)123.66%
EPS 3Y-57.4%
EPS 5Y
EPS Q2Q%
EPS Next Y231.05%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)14.04%
Revenue growth 3Y9.92%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y