Starwood Property Trust, Inc. STWD reported fourth-quarter 2024 adjusted distributable earnings of 48 cents per share, which beat the Zacks Consensus Estimate of 46 cents. The reported figure compares unfavorably with 58 cents per share in the year-ago quarter.

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Results benefited from a decline in expenses. Also, an increase in the cash balance was positive. However, the company recorded a year-over-year decline in book value per share (BVPS) and revenues.

STWD’s fourth-quarter 2024 net income (GAAP basis) was $51.6 million, which fell 27.2% year over year.

For 2024, the company reported adjusted distributable earnings of $2.02 per share, which beat the Zacks Consensus Estimate of $2.00 per share. The reported figure compares unfavorably with $2.05 per share in the year-ago period. Net income was $359.9 million, up from $339.2 million in 2023.

Inside Starwood Property’s Headlines

STWD’s total revenues were $454.4 million, down 12.9% year over year. Also, the top line missed the Zacks Consensus Estimate by 3.7%.

For 2024, total revenues were $1.9 billion, down 5% year over year. Also, the top line missed the Zacks Consensus Estimate by 3%.

Total costs and expenses were $479 million, down 6.1% from the prior-year quarter. The decline was primarily due to a fall in interest expenses, and depreciation and amortization, and other expenses. 

Starwood Property’s BVPS (GAAP basis) was $19.08 as of Dec. 31, 2024, down 4.4% from $19.95 in the prior-year quarter.

In the reported quarter, the company recorded repayments and sales of $1.5 billion, while it received repayments of $1.1 billion in the prior-year quarter.

The company recorded fundings of $1.6 billion, which increased from $1.5 million in the prior-year quarter.

Starwood Property’s Strong Balance Sheet Position

As of Dec. 31, 2024, cash and cash equivalents were $377.8 million, up 5.6% from the prior quarter.

Starwood Property’s originated or acquired assets were $1.6 billion, down from $2.1 billion in the prior quarter.

Loans held for sale were $1.5 billion, down from $2.8 billion in the prior quarter.

Our Take on STWD

Starwood Property’s focus on commercial mortgage-backed securities and commercial real estate debt investments helps generate stable income while capitalizing on market opportunities. Its active engagement in the acquisition and divestiture of properties to enhance its portfolio will optimize its asset base and help it adapt to changing market conditions.

With capital markets continuing to witness a rising trend, STWD expects to increase its pace of investment significantly in 2025. However, a decline in book value is concerning.

STARWOOD PROPERTY TRUST, INC. Price, Consensus and EPS Surprise

STARWOOD PROPERTY TRUST, INC. price-consensus-eps-surprise-chart | STARWOOD PROPERTY TRUST, INC. Quote

STWD currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

Annaly Capital Management, Inc. NLY reported fourth-quarter 2024 adjusted earnings available for distribution per average share of 72 cents, which beat the Zacks Consensus Estimate of 67 cents. The figure increased from 68 cents in the year-ago quarter.

NLY recorded a year-over-year decline in BVPS. Nonetheless, the company’s average yield on interest-earning assets improved in the reported quarter.

AGNC Investment Corp.’s AGNC fourth-quarter 2024 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 37 cents missed the Zacks Consensus Estimate of 42 cents. Also, the bottom line declined from 60 cents in the year-ago quarter.

As of Dec. 31, 2024, tangible net BVPS was $8.41, down 3.3% on a year-over-year basis. As of Dec. 31, 2024, AGNC’s average tangible net book value "at risk" leverage ratio was 7.2X, down from 7.4X from the prior-year quarter.

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