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Exclusive Article Starwood Shares Have Struggled, but Catalysts Could Signal a TurnReported by Jennifer Ryan Woods. Article 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's "Hidden" Company
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 (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 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: better-than-expected revenue, positive commentary on dividend coverage, and a newly authorized share buyback could point to near-term upside. Pandemic Pressure Followed by Rising Rates Pressured Shares Louis Navellier, the fund manager who sold Enron before it crashed 99%, says a $7 trillion force - described by ABC News as 'an economic nightmare' - could devastate ten widely held Wall Street darlings. All ten stocks have received an F rating in his quantitative and eight-factor fundamental model - the same system that flagged Enron when 11 of 13 analysts still rated it a Buy. See all ten stocks Louis Navellier says to sell now Starwood's struggles began with the COVID-19 pandemic, when shares plunged in early 2020 from about $26 to below $10 as mortgage REITs faced liquidity concerns and broad uncertainty in commercial real estate. Shares recovered to pre-pandemic levels by mid-2021 as investor confidence returned, but new headwinds quickly emerged. When interest rates began rising in March 2022, property values fell and lending margins tightened, again pressuring commercial mortgage REITs. The impact on STWD has been significant: shares are down more than 30% over the past five years. Competitors 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. Over the past year, Starwood has underperformed its peers. The stock is down roughly 12% over 12 months and, trading near $17.37 recently, has been flirting with the 52-week low it hit in April 2025. STWD has also lagged the broader REIT industry, which is down less than 12%. By comparison, Ares shares have risen about 4.8% over the past year, Blackstone Mortgage Trust is down roughly 3.7%, and Apollo Commercial Real Estate Finance is up more than 10%. Inconsistent Earnings and Dividend Coverage Weigh on Sentiment One ongoing issue for Starwood has been inconsistent results. While earnings per share (EPS) beat estimates in four of the last six quarters, revenue missed in five of those six. The company also reported negative net interest income in some quarters, which hurt sentiment. Starwood's dividend has added to investor concern. For more than a decade the REIT has paid a quarterly dividend of $0.48 per share, which currently yields about 11.26%. But in the past four quarters earnings did not fully cover that payout, producing a payout ratio of roughly 165%. Against a still-challenging higher-rate backdrop, mixed earnings and uneven dividend coverage have made some investors cautious. Yet several recent developments could help restore confidence: a stronger revenue print, management's commentary about improving dividend coverage, and an authorized 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 topped estimates by roughly $23 million, the first beat after several consecutive revenue misses. Management highlighted a stronger balance sheet—having completed $4.4 billion in capital raises and finishing 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 throughout the year. Still, the continued decline in BVPS remains a concern. After the release, Starwood's board authorized the repurchase of up to $400 million of common stock and convertible notes over the next 12 months using existing cash. A buyback equal 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 Market reaction to the Q4 report and buyback was mixed. Shares rose roughly 2% on heavier volume, though two analysts lowered their price targets even as they maintained 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 next year. Wall Street may stay in a wait-and-see mode for now, but the outlook could turn more constructive if Starwood delivers another quarter of solid earnings and revenue, improves dividend coverage, and begins actively repurchasing shares. Those developments would give investors clearer reasons to revisit the stock. | 
