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Further Reading from MarketBeat.com Starwood Shares Have Struggled, but Catalysts Could Signal a TurnWritten by Jennifer Ryan Woods. Publication Date: 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 not been exempt. 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 last five years. The past year has been challenging for the company, driven by disappointing revenue, declines in book value per share (BVPS), and several quarters in which earnings failed to cover its dividend. However, the tide may be turning: a mix of recent developments could signal near-term upside. Pandemic Pressure Followed by Rising Rates Pressured Shares The AI bottleneck has shifted from chips to power. Goldman Sachs projects demand growing 15% per year, with 40% of AI facilities constrained by electricity shortages by 2027. One company holds $1.5 billion in backlog orders for the exact equipment these data centers need - yet Wall Street still prices it like a sleepy industrial stock. The June SpaceX IPO could change that fast. See the math Wall Street is missing before the SpaceX IPO Starwood's struggles began during the COVID-19 pandemic, when shares plunged in early 2020, falling from around $26 to below $10 as mortgage REITs were hit by liquidity concerns and uncertainty across commercial real estate markets. Shares rebounded 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, again pressuring commercial mortgage REITs. The impact on STWD has been significant: shares have fallen 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 felt the pinch, declining roughly 65%, 40%, and 27%, respectively, over the same period. Over the last year, Starwood has underperformed the group. The stock is down roughly 12% over the past 12 months and, at a recent trading price near $17.37, has been hovering close to the 52-week low it hit in April 2025. The stock has also lagged the broader REIT industry, which is down under 12%, and has been notably weaker than many peers. Over the past 12 months, Ares shares are up about 4.75%, 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 issue that has weighed on Starwood is its inconsistent earnings. While earnings per share (EPS) have beaten expectations in four of the last six quarters, revenue has missed in five of those six. The company has also reported negative net interest income in certain quarters, which dented investor sentiment. Starwood's dividend has added to uncertainty. For more than a decade, the REIT has maintained its quarterly dividend of $0.48 per share, which currently yields about 11.26%. However, over the past four quarters EPS did not fully cover the dividend, resulting in an average payout ratio of roughly 165%—a level that many investors view as unsustainable. Against the still-challenging higher-rate backdrop, the combination of mixed earnings and uneven dividend coverage has made some investors cautious. Still, several recent developments could help reignite optimism: better-than-expected revenue, positive commentary from management about dividend coverage, and a newly authorized share repurchase program. Stronger Results and a Potential Buyback Could Shift Sentiment In Starwood's Q4 2025 earnings report, released on Feb. 25, the REIT reported EPS of $0.42, beating analyst estimates by $0.01. Revenue of $492.95 million came in roughly $23 million above estimates, marking the first revenue beat after multiple consecutive misses. Starwood also highlighted a stronger balance sheet, having executed $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, management said on the earnings call that it expects dividend coverage to improve steadily throughout the year. Nonetheless, the continued decline in BVPS remains a concern. Following the earnings release, the company's board authorized the repurchase of up to $400 million of outstanding common stock and convertible notes over the next 12 months using existing cash. A buyback that could represent up to about 6% of shares outstanding has the potential to meaningfully boost EPS and support the stock. Wall Street Is Waiting for Clearer Signs of Improvement Market reaction to the Q4 results and the buyback announcement was mixed. Shares rose roughly 2% on higher-than-normal volume, though two analysts lowered their price targets while maintaining 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. Wall Street may remain in a wait-and-see mode for now, but the outlook could turn more bullish if Starwood delivers another quarter of strong earnings and revenue, improves dividend coverage, and begins actively repurchasing shares. | 
