REDWOOD TRUST INC (RWT)
US7580754023 - REIT
Overall RWT gets a fundamental rating of 3 out of 10. We evaluated RWT against 64 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 has a decent growth rate and is not valued too expensively.
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.
RWT had a negative operating cash flow in each of the past 5 years.
1.2 Ratios
RWT's Return On Assets of -0.09% is on the low side compared to the rest of the industry. RWT is outperformed by 67.19% of its industry peers.
The Return On Equity of RWT (-1.08%) is worse than 67.19% of its industry peers.
With a Return On Invested Capital value of 0.28%, RWT perfoms like the industry average, outperforming 51.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.09% | ||
| ROE | -1.08% | ||
| ROIC | 0.28% |
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
RWT's Operating Margin of 6.74% is in line compared to the rest of the industry. RWT outperforms 45.31% of its industry peers.
RWT's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 14.94%, RWT is doing worse than 67.19% of the companies in the same industry.
In the last couple of years the Gross Margin of RWT has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.74% | ||
| PM (TTM) | N/A | ||
| GM | 14.94% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), RWT is destroying value.
RWT has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, RWT has more shares outstanding
Compared to 1 year ago, RWT has an improved debt to assets ratio.
2.2 Solvency
RWT has an Altman-Z score of 0.10. This is a bad value and indicates that RWT is not financially healthy and even has some risk of bankruptcy.
RWT has a Altman-Z score of 0.10. This is in the better half of the industry: RWT outperforms 62.50% of its industry peers.
A Debt/Equity ratio of 10.85 is on the high side and indicates that RWT has dependencies on debt financing.
RWT has a worse Debt to Equity ratio (10.85) than 95.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 10.85 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.1 |
ROIC/WACC0.06
WACC4.56%
2.3 Liquidity
A Current Ratio of 0.27 indicates that RWT may have some problems paying its short term obligations.
With a Current ratio value of 0.27, RWT perfoms like the industry average, outperforming 56.25% of the companies in the same industry.
A Quick Ratio of 0.27 indicates that RWT may have some problems paying its short term obligations.
RWT has a Quick ratio (0.27) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.27 | ||
| Quick Ratio | 0.27 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 122.54% over the past year.
The earnings per share for RWT have been decreasing by -38.30% on average. This is quite bad
The Revenue has been growing slightly by 7.31% in the past year.
The Revenue has been growing by 14.94% on average over the past years. This is quite good.
EPS 1Y (TTM)122.54%
EPS 3Y-57.4%
EPS 5Y-38.3%
EPS growth Q2Q112.5%
Revenue 1Y (TTM)7.31%
Revenue growth 3Y9.92%
Revenue growth 5Y14.94%
Revenue growth Q2Q29.81%
3.2 Future
Based on estimates for the next years, RWT will show a very strong growth in Earnings Per Share. The EPS will grow by 109.00% on average per year.
Based on estimates for the next years, RWT will show a quite strong growth in Revenue. The Revenue will grow by 10.17% on average per year.
EPS Next Y253.58%
EPS Next 2Y109%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year7.36%
Revenue Next 2Y10.17%
Revenue Next 3YN/A
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 estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 35.44, the valuation of RWT can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of RWT indicates a slightly more expensive valuation: RWT is more expensive than 64.06% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 25.25. RWT is valued slightly more expensive when compared to this.
RWT is valuated reasonably with a Price/Forward Earnings ratio of 10.02.
RWT's Price/Forward Earnings is on the same level as the industry average.
RWT is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.67, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.44 | ||
| Fwd PE | 10.02 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RWT is valued a bit cheaper than the industry average as 62.50% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 180.96 |
4.3 Compensation for Growth
RWT's 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 109.00% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.14
PEG (5Y)N/A
EPS Next 2Y109%
EPS Next 3YN/A
5. Dividend
5.1 Amount
RWT has a Yearly Dividend Yield of 11.37%, which is a nice return.
Compared to an average industry Dividend Yield of 13.34, RWT's dividend is way lower than its industry peers. On top of this 84.38% of the companies listed in the same industry pay a better dividend than RWT!
RWT's Dividend Yield is rather good when compared to the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 11.37% |
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
The earnings of RWT are negative and hence is the payout ratio. RWT will probably not be able to sustain this dividend level.
DP-722.2%
EPS Next 2Y109%
EPS Next 3YN/A
REDWOOD TRUST INC
NYSE:RWT (4/25/2024, 11:29:04 AM)
5.67
-0.09 (-1.56%)
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 Cap746.51M
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 11.37% |
Dividend Growth(5Y)
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Surprises & Revisions
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.44 | ||
| Fwd PE | 10.02 | ||
| 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)0.14
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.09% | ||
| ROE | -1.08% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 6.74% | ||
| PM (TTM) | N/A | ||
| GM | 14.94% | ||
| 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 | 10.85 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.27 | ||
| Quick Ratio | 0.27 | ||
| 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)
Growth
EPS 1Y (TTM)122.54%
EPS 3Y-57.4%
EPS 5Y
EPS growth Q2Q
EPS Next Y253.58%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)7.31%
Revenue growth 3Y9.92%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
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