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Just For You Starwood Shares Have Struggled, but Catalysts Could Signal a TurnSubmitted by Jennifer Ryan Woods. Originally 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, the 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 trend meaningfully lower over the past five years. The last year was especially challenging: disappointing revenue, declines in book value per share (BVPS), and several quarters in which earnings failed to cover the dividend all pressured the stock. Still, recent developments suggest the tide may be turning and could create near-term upside. Pandemic Pressure Followed by Rising Rates Pressured Shares A $2 gold stock is said to quietly control what may be the largest gold deposit in the world - worth nearly $1 trillion. According to Jim Rickards, an announcement is expected around April 15 that could bring this historic discovery into public view. See the full details on this $2 gold stock before April 15 Starwood’s struggles began during the COVID-19 pandemic, when shares plunged in early 2020, falling from around $26 to below $10 as mortgage REITs were hit by 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 interest rates began rising in March 2022, property values declined and lending margins tightened, again pressuring commercial mortgage REITs. The impact on STWD stock has been significant, with shares falling more than 30% over the past five years. Peers were also hit: 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 underperformed the group. The stock is down roughly 12% over the past 12 months and, at a recent trading price near $17.37, has been flirting with the 52-week low hit in April 2025. Starwood has also lagged the broader REIT industry, which is down less than 12%, and has been weaker than many close peers. Over the past 12 months, Ares shares are up about 4.75%, Blackstone Mortgage Trust is down roughly 3.65%, and Apollo Commercial Real Estate Finance is up more than 10%. Inconsistent Earnings and Dividend Coverage Weigh on Sentiment One issue weighing on Starwood is its inconsistent earnings. While earnings per share (EPS) have beaten estimates in four of the last six quarters, revenue missed in five of those six. The company has also reported negative net interest income in some quarters, which hurt sentiment. Starwood’s dividend has added uncertainty. For more than a decade, the REIT has paid a quarterly dividend of $0.48 per share, which currently yields about 11.26%. But over the past four quarters, earnings did not fully cover the dividend, producing an unsustainably high payout ratio of roughly 165%. Against the still-challenging higher-rate backdrop, mixed earnings and uneven dividend coverage have made some investors cautious. Still, several recent developments could help restore confidence: better-than-expected revenue, constructive commentary from management on dividend coverage, and a newly authorized share repurchase program. 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 analyst estimates by $0.01. Revenue of $492.95 million came in about $23 million above estimates, its first meaningful revenue beat after multiple consecutive misses. The company said it has strengthened its balance sheet, executing $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, management said on the earnings call it expects dividend coverage to improve steadily over the year. A continued decline in BVPS remains a concern, however. After the earnings release, Starwood announced its board authorized the repurchase of up to $400 million of outstanding common stock and convertible notes over the next 12 months using existing cash. A buyback of as much as roughly 6% of shares outstanding could meaningfully boost earnings per share and offer support for the stock, depending on execution and timing. Wall Street Is Waiting for Clearer Signs of Improvement The market reaction to the fourth-quarter results and the buyback was mixed. Shares rose about 2% on above-average volume, though two analysts trimmed their price targets while keeping 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 from current levels. Wall Street may remain cautious until Starwood produces another quarter of stronger earnings and revenue, improves dividend coverage, and begins to execute the repurchase program. If those catalysts materialize, the outlook could become meaningfully more bullish in the near term. | 
