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Featured Story from MarketBeat.com Starwood Shares Have Struggled, but Catalysts Could Signal a TurnSubmitted by Jennifer Ryan Woods. Date Posted: 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 move meaningfully lower over the past five years. The past year has been challenging, driven by disappointing revenue, declines in book value per share (BVPS), and several quarters in which earnings did not cover the dividend. Still, recent developments could signal near-term upside. Pandemic Pressure Followed by Rising Rates Pressured Shares After nearly five decades on Wall Street, Louis Navellier says a major currency shift is already underway - and the wealthiest Americans, including Musk, Zuckerberg, and Ellison, are quietly moving money out of dollars and into a different type of asset entirely. It's not bitcoin or any other crypto. Navellier has identified 7 companies he believes are positioned at the center of this trend - the last time he spotted a setup like this, Nvidia climbed as high as 10,000%. Watch Navellier's urgent briefing and get all 7 company names Starwood's troubles began during the COVID-19 pandemic when shares plunged in early 2020, falling from around $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, but rising rates that began in March 2022 quickly created new headwinds—property values declined and lending margins tightened, pressuring commercial mortgage REITs once again. The effect on STWD has been substantial: shares are down more than 30% over the last five years. Peer REITs 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 the group, with the stock down roughly 12%. Trading near $17.37, it has been flirting with the 52-week low reached in April 2025. The stock has also lagged the broader REIT industry, which is down about 12%, and has been weaker than many peers. Over the past 12 months, Ares shares rose around 4.75%, Blackstone Mortgage Trust declined about 3.65%, and Apollo Commercial Real Estate Finance gained more than 10%. Inconsistent Earnings and Dividend Coverage Weigh on Sentiment One factor weighing on Starwood is inconsistent results. While earnings per share (EPS) beat estimates 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 dampened investor sentiment. Dividend coverage has been another concern. For more than a decade the REIT has paid a quarterly dividend of $0.48 per share, currently yielding roughly 11.26%. However, over the past four quarters earnings did not fully cover that payout, producing an unsustainable payout ratio of about 165%. Against a still-challenging higher-rate backdrop, mixed results and uneven dividend coverage have made some investors cautious. Still, recent stronger revenue, management commentary about improving dividend coverage and a newly authorized share repurchase program 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 estimates by $0.01. Revenue of $492.95 million topped estimates by roughly $23 million, breaking a string of revenue misses. Management also highlighted a stronger balance sheet after raising $4.4 billion in capital and finishing the year with $1.4 billion in liquidity. Although EPS did not cover the $0.48 quarterly dividend, the company said on the earnings call it expects dividend coverage to improve steadily through the year. A continued decline in BVPS, however, remains a concern. After 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 using existing cash. A buyback that could represent up to roughly 6% of shares outstanding may meaningfully boost EPS and support the stock if executed. Wall Street Is Waiting for Clearer Signs of Improvement Market reaction to the Q4 report and buyback announcement was mixed. Shares rose about 2% on above-average volume, though two analysts lowered 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 over the next year. Wall Street may remain cautious in the near term, but the outlook could shift more bullish if Starwood delivers another quarter of strong revenue and earnings, materially improves dividend coverage and begins to repurchase shares in earnest. | 