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More Reading from MarketBeat Starwood Shares Have Struggled, but Catalysts Could Signal a TurnBy Jennifer Ryan Woods. Published: 3/31/2026. 
Key Points - Starwood Property Trust has been under pressure from rising interest rates and company-specific challenges, with the stock down more than 30% over the past five years and lagging its peers over the last year.
- Inconsistent earnings, repeated revenue misses, and uneven dividend coverage have weighed on investor sentiment, even as the company has maintained its high dividend payout.
- Recent developments, including a stronger earnings report, improving commentary around dividend coverage, and a newly authorized share buyback, could help shift sentiment if the company delivers more consistent results.
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Over the last several years, a higher interest rate environment has been a persistent headwind for commercial real estate, and Starwood Property Trust (NYSE: STWD) has been no exception. The real estate investment trust (REIT), which specializes in originating, acquiring, and managing commercial mortgage loans and other real estate-related investments, has seen its stock trade meaningfully lower over the past five years. This past year has been particularly challenging, driven by disappointing revenue, declines in book value per share (BVPS), and several quarters in which earnings failed to cover the dividend. However, a mix of recent developments suggests the tide may be turning and could create near-term upside. Pandemic Pressure Followed by Rising Rates Pressured Shares Starwood's troubles began during the COVID-19 pandemic, when shares plunged in early 2020 from around $26 to below $10 as mortgage REITs faced liquidity concerns and uncertainty across commercial real estate markets. Shares rebounded to pre-pandemic levels by mid-2021 as investor confidence returned, but new headwinds quickly emerged. As rates started rising in March 2022, property values declined and lending margins tightened, applying renewed pressure to commercial mortgage REITs. The impact on STWD stock has been significant: shares are down more than 30% over the past five years. Peers were hit, too — Ares Commercial Real Estate (NYSE: ACRE), Blackstone Mortgage Trust (NYSE: BXMT), and Apollo Commercial Real Estate Finance (NYSE: ARI) fell roughly 65%, 40%, and 27%, respectively, over the same period. Over the last year, Starwood has underperformed the group. The stock has declined roughly 12% over 12 months and, at a recent trading price near $17.37, has been flirting with the 52-week low it hit in April 2025. It has also lagged the broader REIT industry, which is down less than 12%, and many peers: Ares is up about 4.75%, Blackstone Mortgage Trust is down roughly 3.65%, and Apollo Commercial Real Estate Finance is up more than 10% over the same period. Inconsistent Earnings and Dividend Coverage Weigh on Sentiment One persistent concern has been Starwood's inconsistent earnings. While EPS has beaten expectations in four of the last six quarters, revenue missed estimates in five of those six quarters. The company has also reported negative net interest income in some quarters, which has hurt sentiment. Starwood's dividend has added to investor unease. For more than a decade the REIT has paid a quarterly dividend of $0.48 per share, which currently yields about 11.26%. However, over the past four quarters earnings did not fully cover the dividend, producing a payout ratio of roughly 165%, which is not sustainable. Against a still-challenging higher-rate backdrop, mixed results and uneven dividend coverage have made some investors cautious. That said, a few recent developments — better-than-expected revenue, constructive commentary from management about improving dividend coverage, and an authorized share buyback — could help restore confidence if they translate into tangible improvement. Stronger Results and a Potential Buyback Could Shift Sentiment In Starwood's Q4 2025 earnings report released Feb. 25, the REIT reported EPS of $0.42, beating estimates by $0.01. Revenue of $492.95 million came in about $23 million above expectations — the first better-than-expected revenue figure after a string of misses. Management highlighted a stronger balance sheet, having completed $4.4 billion in capital raises and ending the year with $1.4 billion in liquidity. While EPS still fell short of covering the $0.48 quarterly dividend, the company said on the earnings call that it expects dividend coverage to improve steadily through the year. A continued decline in BVPS remains a concern, however. After the earnings release, the board authorized a repurchase program of up to $400 million of common stock and convertible notes over the next 12 months using existing cash. That repurchase — roughly equivalent to as much as about 6% of shares outstanding — could meaningfully boost EPS and provide support for the stock if executed. Wall Street Is Waiting for Clearer Signs of Improvement The market reaction to the Q4 results and buyback was muted. Shares rose roughly 2% on higher-than-normal volume, but two analysts lowered their price targets even as both maintained Outperform ratings. Currently, four analysts rate the stock a Hold and three rate it a Buy. The average 12-month price target implies nearly 16% upside over the next year. Wall Street may remain cautious until Starwood delivers another quarter of solid earnings and revenue, improves dividend coverage, and begins actively repurchasing shares. If the company can demonstrate that trend, investor sentiment could shift more decisively in its favor. | 
