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Bonus News from MarketBeat Media
Starwood Shares Have Struggled, but Catalysts Could Signal a TurnBy Jennifer Ryan Woods. First 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.
- Special Report: Elon Musk already made me a “wealthy man”
Over the past several years, higher interest rates have been a persistent headwind for commercial real estate, and Starwood Property Trust (NYSE: STWD) has been no exception. The real estate investment trust—which originates, acquires, and manages commercial mortgage loans and other real-estate investments—has seen its stock decline significantly over the past five years. The 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. Still, recent developments suggest the tide may be turning and could create near-term upside. Pandemic Pressure Followed by Rising Rates Pressured SharesStarwood’s troubles began during the COVID-19 pandemic. 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. The stock recovered to pre-pandemic levels by mid-2021, but rising rates after March 2022 pushed property values down and compressed lending margins, renewing pressure on commercial mortgage REITs.
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The impact on STWD has been notable: shares are down more than 30% over the past five years. Competitors such as Ares Commercial Real Estate (NYSE: ACRE), Blackstone Mortgage Trust (NYSE: BXMT), and Apollo Commercial Real Estate Finance (NYSE: ARI) also suffered, falling roughly 65%, 40%, and 27%, respectively, over the same period. Over the last year, Starwood has underperformed the group. The stock is down about 12% year-over-year and, at a recent 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%. By comparison, Ares shares have risen roughly 4.75% over the past 12 months, 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 SentimentAn ongoing issue for Starwood has been its inconsistent earnings. EPS beat estimates in four of the last six quarters, but revenue missed in five of those six periods. The company also reported weaker net interest income in certain quarters, which has dented investor confidence. 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 near 165% (approximately 113% based on 2025 distributable EPS). Against a still-challenging higher-rate backdrop, mixed earnings and uneven dividend coverage have made some investors cautious. That said, recent better-than-expected revenue, positive commentary from management about improving dividend coverage, and a newly authorized share buyback could help restore confidence. Stronger Results and a Potential Buyback Could Shift SentimentIn 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 also 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 did not cover the $0.48 quarterly dividend, the company said on the earnings call it expects dividend coverage to improve steadily during the year. A continued decline in BVPS, however, remains a concern. After the release, the board authorized the repurchase of up to $400 million of common stock and convertible notes over the next 12 months using existing cash. That program could represent roughly 6% of shares outstanding, and if executed could meaningfully boost earnings per share and support the stock. Wall Street Is Waiting for Clearer Signs of ImprovementMarket reaction to the quarter and the buyback was mixed. Shares rose about 2% on higher-than-average volume, but two analysts lowered their price targets even as they maintained Outperform ratings. Currently, four analysts rate the stock a Hold and three rate it a Buy. The average 12-month price target implies potential upside of nearly 16%. Wall Street may remain cautious until Starwood delivers another quarter of stronger earnings and revenue, improves dividend coverage, and begins actively repurchasing shares. If those catalysts materialize, sentiment could turn more bullish in the near term. |
