Analyzing the Dividend Performance of Redwood Trust Inc (RWT)
A Comprehensive Look at the Dividend History, Yield, and Growth of Redwood Trust Inc
Redwood Trust Inc(NYSE:RWT) recently announced a dividend of $0.16 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-21. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Redwood Trust Inc's dividend performance and assess its sustainability.
About Redwood Trust Inc
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Redwood Trust Inc is a real estate investment trust focused on different areas of housing credit. The company operates in three segments: the Residential Mortgage Banking segment, the Business Purpose Mortgage Banking segment, and the Investment Portfolio segment. It aims to provide diverse and reliable income sources through its various operations.
Redwood Trust Inc's Dividend History
Redwood Trust Inc has maintained a consistent dividend payment record since 1995, with dividends currently distributed on a quarterly basis. This consistency is a positive sign for investors seeking regular income from their investments.
Redwood Trust Inc's Dividend Yield and Growth
As of today, Redwood Trust Inc currently has a 12-month trailing dividend yield of 11.24% and a 12-month forward dividend yield of 8.52%. This suggests an expectation of decreased dividend payments over the next 12 months. Over the past three, five, and ten years, the company's dividend growth rate has been negative, indicating a contraction in dividends over these periods.
Assessing Dividend Sustainability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. As of 2023-06-30, Redwood Trust Inc's dividend payout ratio is 0.00. The company's profitability rank is 3 out of 10, suggesting the dividend may not be sustainable. The company has reported net profit in 8 years out of the past 10 years.
Future Growth Prospects
Robust growth metrics are essential for the sustainability of dividends. Redwood Trust Inc's growth rank of 3 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Conclusion
While Redwood Trust Inc has a long history of dividend payments, its negative dividend growth rate, low profitability rank, and poor growth prospects raise concerns about the sustainability of its dividends. Investors should carefully consider these factors before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
