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Just For You Starwood Shares Have Struggled, but Catalysts Could Signal a TurnReported 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) was 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 trended 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 its dividend. Recent developments, however, suggest the tide may be turning: better revenue, management commentary about improving dividend coverage, and a newly authorized share repurchase could signal near-term upside. Pandemic Pressure Followed by Rising Rates Pressured Shares Trump mocked crypto in public — then built the pipes in private. A few years ago, Trump slammed crypto in public. Then the real move started in private. The crypto market still sits near $2.40 trillion in value, with $105.7 billion trading in a single day… See the Trump Power Plays briefing here. Starwood's struggles began during the COVID-19 pandemic, when shares plunged in early 2020 from around $26 to below $10 as mortgage REITs faced liquidity concerns and broad uncertainty in commercial real estate. Shares rebounded to pre-pandemic levels by mid-2021, but rising rates beginning in March 2022 pushed property values down and tightened lending margins, again pressuring commercial mortgage REITs. The impact on STWD has been significant: shares are down more than 30% over the past five years. Starwood was not alone — peers such as 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. More recently, Starwood underperformed the group. The stock has declined roughly 12% over the past year and, trading around $17.37, has been flirting with the 52-week low hit in April 2025. It has also lagged the broader REIT industry, which is down less than 12%, and trailed several peers over the past 12 months: Ares is 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 challenge for Starwood has been inconsistent results. While earnings per share (EPS) beat expectations in four of the last six quarters, revenue missed in five of those six. The company has also reported negative net interest income in some quarters, which has dented investor confidence. Starwood's dividend has added to uncertainty. For more than a decade, the REIT has paid a quarterly dividend of 48 cents 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 of roughly 165% — a level that investors view as unsustainable. Against the still-challenging higher-rate backdrop, mixed earnings and uneven dividend coverage have kept some investors on the sidelines. Still, recent signs of improvement — a revenue beat, management optimism on dividend coverage, and an authorized buyback — could help restore confidence if follow-through emerges. 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 came in about $23 million above estimates — its first revenue beat after several consecutive misses. Management also pointed to a stronger balance sheet, noting $4.4 billion in capital raises and $1.4 billion in year-end liquidity. While EPS still did not cover the 48-cent quarterly dividend, the company said on the earnings call it expects dividend coverage to improve steadily through the year. Nevertheless, the continued decline in BVPS remains a concern for some investors. Following the earnings release, Starwood'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 equal to as much as roughly 6% of shares outstanding could meaningfully boost EPS and provide support for the stock, depending on execution. Wall Street Is Waiting for Clearer Signs of Improvement Market reaction to the Q4 results and buyback was mixed. Shares rose roughly 2% on higher-than-normal volume, but two analysts lowered their price targets while maintaining Outperform ratings on the stock. Currently, four analysts rate STWD 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 until Starwood delivers another quarter of solid earnings and revenue, demonstrates improving dividend coverage, and begins actively repurchasing shares. If management executes on those fronts, sentiment could shift more decisively in the near term. | 
