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Featured Content from MarketBeat.com Starwood Shares Have Struggled, but Catalysts Could Signal a TurnAuthor: 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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Higher interest rates have been a persistent headwind for commercial real estate, and Starwood Property Trust (NYSE: STWD) is 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 decline meaningfully over the past five years. This past year has been especially challenging: disappointing revenue, declines in book value per share (BVPS), and several quarters in which earnings failed to cover the dividend have hurt sentiment. Still, recent developments suggest the tide may be turning and could provide near-term upside. Pandemic Pressure Followed by Rising Rates Pressured Shares Elon Musk believes this technology could make Tesla the most valuable company in the world — yet the core infrastructure powering it is not owned by Tesla at all. It belongs to one of Musk's private ventures, with thousands of systems already running globally around the clock. Veteran tech investor Matt McCall has identified a little-known way everyday investors can gain exposure. The stock is currently trading for less than $30. Reveal the ticker now Starwood's troubles began during the COVID-19 pandemic, when shares plunged in early 2020, falling from about $26 to below $10 as mortgage REITs faced liquidity concerns and uncertainty across commercial real estate markets. Shares recovered to near pre-pandemic levels by mid-2021, but rising interest rates beginning in March 2022 again weighed on property values and lending margins, pressuring commercial mortgage REITs. The impact on STWD has been significant: shares are down more than 30% over the past five years. Peers also suffered—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. More recently, Starwood underperformed its group. The stock has declined about 12% over the last 12 months and, trading near $17.37, has flirted with the 52-week low set in April 2025. STWD has also lagged the broader REIT industry, which is down less than 12%, and underperformed several peers. Over the past year, Ares shares have risen roughly 4.75%, Blackstone Mortgage Trust is down about 3.65%, and Apollo Commercial Real Estate Finance is up more than 10%. Inconsistent Earnings and Dividend Coverage Weigh on Sentiment One persistent issue has been inconsistent results. While earnings per share (EPS) have 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 certain periods, which has dampened investor confidence. Starwood's dividend has been another source of concern. For more than a decade the REIT has paid a quarterly dividend of $0.48 per share, which currently yields roughly 11.3%. However, in the past four quarters earnings did not fully cover that payout, producing a payout ratio near 165%—a level that investors consider unsustainable. Against the still-challenging higher-rate backdrop, mixed earnings and weak dividend coverage have made some investors cautious. That said, a few recent positive developments—better-than-expected revenue, management commentary about improving dividend coverage, and a newly authorized share buyback—could help restore confidence. 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 was about $23 million above expectations—the first revenue beat after multiple consecutive misses. Management highlighted a stronger balance sheet, noting $4.4 billion in capital raises and year-end liquidity of $1.4 billion. While EPS still fell short of covering the $0.48 quarterly dividend, the company said on the earnings call it expects dividend coverage to steadily improve during the year. Despite those positives, a continued decline in BVPS remains a risk. After the quarter, Starwood's board authorized the repurchase of up to $400 million of common stock and convertible notes over the next 12 months, funded with existing cash. A buyback equal to roughly 6% of shares outstanding could meaningfully boost earnings per share and provide support for the stock, though the ultimate impact will depend on execution and timing. Wall Street Is Waiting for Clearer Signs of Improvement Market reaction to the Q4 report and the buyback was muted. Shares rose about 2% on heavier-than-normal volume, but two analysts trimmed their price targets while keeping Outperform ratings on the stock. Currently, four analysts rate STWD a Hold and three rate it a Buy. The average 12-month price target implies roughly 16% upside from current levels. Wall Street may remain cautious until Starwood delivers another quarter of stronger revenue and earnings, demonstrably improves dividend coverage, and begins executing the buyback. If those elements fall into place, investor sentiment could shift more positively in the months ahead. | 
