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Saturday's Bonus Story 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 originates, acquires and manages commercial mortgage loans and other real estate-related investments—has seen its stock trend meaningfully lower 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 Shares A former Pentagon and CIA advisor is flagging April 15 as a critical date for gold investors. He says the U.S. government is set to grant final authorization for mining operations at what he believes is the largest gold deposit in the world. The company behind it trades at just $2 per share and has largely flown under the radar. He believes early investors positioned before the announcement stand to benefit most. View his full analysis and see the details behind this gold play Starwood's difficulties began during the COVID-19 pandemic, when shares plunged in early 2020, falling from about $26 to under $10 as mortgage REITs faced liquidity concerns and broad uncertainty across commercial real estate markets. Shares recovered to pre-pandemic levels by mid-2021 as investor confidence returned, but new headwinds emerged soon after. When rates began rising in March 2022, property values declined and lending margins tightened, once again pressuring commercial mortgage REITs. The impact on STWD has been sizable: shares are down more than 30% over the past five years. Peers felt the pain as well—Ares Commercial Real Estate (NYSE: ACRE), Blackstone Mortgage Trust (NYSE: BXMT), and Apollo Commercial Real Estate Finance (NYSE: ARI) declined roughly 65%, 40%, and 27%, respectively, over that span. Over the last year, Starwood underperformed many of those peers. The stock is down roughly 12% year over year and, at a recent trading price near $17.37, has been flirting with the 52-week low reached in April 2025. Starwood has also lagged the broader REIT sector, which is down less than 12%. By comparison, Ares is up about 4.75% over the past 12 months, 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 persistent concern has been inconsistent earnings. While earnings per share (EPS) beat expectations in four of the last six quarters, revenue missed in five of those six periods. 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 48 cents per share, currently yielding roughly 11.26%. But over the past four quarters, earnings did not fully cover the dividend, producing a payout ratio near 165%—a level that investors view as unsustainable if it persists. Against the still-challenging higher-rate backdrop, the mix of uneven earnings and weak dividend coverage has made investors cautious. That said, several recent developments could help restore confidence: a better-than-expected revenue report, management's commentary about improving dividend coverage, and an 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 posted EPS of $0.42, beating analyst estimates by $0.01. Revenue of $492.95 million came in about $23 million above estimates, marking the first revenue beat after multiple consecutive misses. The company highlighted a stronger balance sheet, noting it executed $4.4 billion in capital raises and ended the year with $1.4 billion in liquidity. Although EPS did not cover the 48-cent quarterly dividend, management said on the earnings call it expects dividend coverage to improve steadily through the year. BVPS declines remain a concern, however. Following the earnings release, Starwood's board authorized the repurchase of up to $400 million of common stock and convertible notes over the next 12 months, to be funded from existing cash. That repurchase could represent up to roughly 6% of shares outstanding and, if executed, may boost EPS and provide support for the share price. Wall Street Is Waiting for Clearer Signs of Improvement Investor reaction to the fourth-quarter results and the buyback announcement was mixed. Shares rose about 2% on higher-than-normal volume, but two analysts trimmed their price targets while retaining Outperform ratings. At present, 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 coming year. Wall Street may remain cautious until there are clearer signs of sustained improvement. The outlook could turn more bullish if Starwood delivers another quarter of strong earnings and revenue, materially improves dividend coverage and begins to execute the repurchase program. | 
