DB:VSP

Stock Analysis Report

Executive Summary

Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States and Europe.

Rewards

Trading at 63.8% below its fair value

Revenue is forecast to grow 29.71% per year

Earnings grew by 32.3% over the past year

Pays a high and reliable dividend of 14.87%

Risk Analysis

Earnings are forecast to decline by an average of -0.6% per year for the next 3 years

Dividend of 14.87% is not well covered by earnings

Highly volatile share price over past 3 months

Large one-off items impacting financial results

+ 1 more risk


Snowflake Analysis

Established dividend payer and fair value.


Similar Companies

Share Price & News

How has Starwood Property Trust's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VSP's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

23.5%

VSP

23.7%

DE Mortgage REITs

7.3%

DE Market


1 Year Return

-49.7%

VSP

-48.4%

DE Mortgage REITs

-17.7%

DE Market

Return vs Industry: VSP exceeded the German Mortgage REITs industry which returned -48.4% over the past year.

Return vs Market: VSP underperformed the German Market which returned -17.7% over the past year.


Shareholder returns

VSPIndustryMarket
7 Day23.5%23.7%7.3%
30 Day-49.7%-45.1%-17.9%
90 Day-55.4%-48.4%-25.8%
1 Year-44.8%-49.7%-43.5%-48.4%-15.1%-17.7%
3 Year-37.5%-52.5%-32.1%-50.1%-18.7%-25.6%
5 Year-28.5%-54.6%-17.1%-51.6%-17.7%-29.0%

Price Volatility Vs. Market

How volatile is Starwood Property Trust's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Starwood Property Trust undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VSP (€12.3) is trading below our estimate of fair value (€33.94)

Significantly Below Fair Value: VSP is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: VSP is poor value based on its PE Ratio (7.1x) compared to the Mortgage REITs industry average (5.1x).

PE vs Market: VSP is good value based on its PE Ratio (7.1x) compared to the German market (16.4x).


Price to Earnings Growth Ratio

PEG Ratio: VSP's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: VSP is overvalued based on its PB Ratio (0.8x) compared to the XX Mortgage REITs industry average (0.5x).


Next Steps

Future Growth

How is Starwood Property Trust forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

-0.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VSP's earnings are forecast to decline over the next 3 years (-0.6% per year).

Earnings vs Market: VSP's earnings are forecast to decline over the next 3 years (-0.6% per year).

High Growth Earnings: VSP's earnings are forecast to decline over the next 3 years.

Revenue vs Market: VSP's revenue (29.7% per year) is forecast to grow faster than the German market (4.1% per year).

High Growth Revenue: VSP's revenue (29.7% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VSP's Return on Equity is forecast to be low in 3 years time (13.2%).


Next Steps

Past Performance

How has Starwood Property Trust performed over the past 5 years?

-2.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VSP has a large one-off gain of $239.9M impacting its December 31 2019 financial results.

Growing Profit Margin: VSP's current net profit margins (74.7%) are higher than last year (56.7%).


Past Earnings Growth Analysis

Earnings Trend: VSP's earnings have declined by -2.3% per year over the past 5 years.

Accelerating Growth: VSP's earnings growth over the past year (32.3%) exceeds its 5-year average (-2.3% per year).

Earnings vs Industry: VSP earnings growth over the past year (32.3%) exceeded the Mortgage REITs industry 14.3%.


Return on Equity

High ROE: VSP's Return on Equity (10.5%) is considered low.


Next Steps

Financial Health

How is Starwood Property Trust's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: VSP has a low level of unsold assets or inventory.

Debt Coverage by Assets: VSP's debt is covered by short term assets (assets are 1x debt).


Financial Institutions Analysis

Asset Level: VSP's level of assets compared to its equity is moderate.

Allowance for Bad Loans: Insufficient data to determine if VSP has a sufficient allowance for bad loans.

Low Risk Liabilities: VSP reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if VSP has an acceptable proportion of non-loan assets held.

Low Risk Deposits: VSP has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if VSP has an appropriate level of bad loans.


Next Steps

Dividend

What is Starwood Property Trust's current dividend yield, its reliability and sustainability?

17.10%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: VSP's dividend (14.87%) is higher than the bottom 25% of dividend payers in the German market (1.7%).

High Dividend: VSP's dividend (14.87%) is in the top 25% of dividend payers in the German market (4.97%)


Stability and Growth of Payments

Stable Dividend: VSP's dividends per share have been stable in the past 10 years.

Growing Dividend: VSP's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (106%), VSP's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: VSP's dividends in 3 years are forecast to be covered by earnings (85.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.5yrs

Average management tenure


CEO

Barry Sternlicht (58yo)

11.17s

Tenure

Mr. Barry Stuart Sternlicht has been the Director at LOG Commercial Properties e Participações S.A. Mr. Sternlicht serves as the Director at Invitation Homes Inc.; Starwood Real Estate Income Trust, Inc. a ...


Leadership Team

NamePositionTenureCompensationOwnership
Barry Sternlicht
Chairman & CEO11.17yrsno data2.45% $81.1m
Jeffrey DiModica
President & MD5.5yrsUS$4.55m0.11% $3.6m
Rina Paniry
CFO, Treasurer5.83yrsUS$2.67m0.094% $3.1m
Andrew Sossen
COO, General Counsel8.67yrsUS$2.48m0.078% $2.6m
Zachary Tanenbaum
Director of Investor Relationsno datano datano data
Mark Cagley
Chief Credit Officer4.75yrsno datano data
Dennis Schuh
Chief Originations Officer3.75yrsno datano data
Cary Carpenter
Managing Directorno datano datano data
Denise Tait
President of Starwood Infrastructure Finance1.33yrsno datano data
Rich Highfield
President of Starwood Mortgage Capitalno datano datano data

5.5yrs

Average Tenure

48.5yo

Average Age

Experienced Management: VSP's management team is seasoned and experienced (5.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Barry Sternlicht
Chairman & CEO11.17yrsno data2.45% $81.1m
Strauss Zelnick
Independent Director11.17yrsUS$259.44k0.020% $671.8k
Jeffrey Dishner
Director11.17yrsno data0.13% $4.2m
Richard Bronson
Lead Independent Directorno dataUS$286.94k0.023% $753.6k
Lawrence Brown
Chairman of Starwood Mortgage Capital1.17yrsno datano data
Fred Ridley
Independent Director1.5yrsUS$221.94k0.0035% $115.6k
Camille Douglas
Independent Director10.17yrsUS$231.94k0.013% $420.2k
Solomon Kumin
Independent Director5.67yrsUS$229.44k0.011% $352.3k

10.2yrs

Average Tenure

62yo

Average Age

Experienced Board: VSP's board of directors are seasoned and experienced ( 10.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: VSP insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.3%.


Top Shareholders

Company Information

Starwood Property Trust, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Starwood Property Trust, Inc.
  • Ticker: VSP
  • Exchange: DB
  • Founded: 2009
  • Industry: Mortgage REITs
  • Sector: Diversified Financials
  • Market Cap: US$3.653b
  • Listing Market Cap: US$3.311b
  • Shares outstanding: 282.97m
  • Website: https://www.starwoodpropertytrust.com

Number of Employees


Location

  • Starwood Property Trust, Inc.
  • 591 West Putnam Avenue
  • Greenwich
  • Connecticut
  • 6830
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
STWDNYSE (New York Stock Exchange)YesCommon StockUSUSDAug 2009
VSPDB (Deutsche Boerse AG)YesCommon StockDEEURAug 2009
0L9FLSE (London Stock Exchange)YesCommon StockGBUSDAug 2009
VSPBRSE (Berne Stock Exchange)YesCommon StockCHCHFAug 2009
STWD *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNAug 2009

Biography

Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States and Europe. It operates through Commercial and Residential Lending, Infrastructure Lending, Property, and Investing and Servicing segments. The Commercial and Residential Lending segment originates, acquires, finances, and manages commercial and residential first mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), residential mortgage-backed securities, and other real estate and real estate-related debt investments. The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments. The Property segment acquires and manages equity interests in commercial real estate properties, including multi-family properties. The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS, including subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets, including properties acquired from CMBS trusts. The company qualifies as a REIT for federal income tax purposes and would not be subject to federal corporate income taxes, if it distributes at least 90% of its taxable income to its stockholders. Starwood Property Trust, Inc. was founded in 2009 and is headquartered in Greenwich, Connecticut. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/30 22:23
End of Day Share Price2020/03/30 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.