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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Starwood Property Trust, Inc. (XNYS:STWD) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
STWD
Name:
STARWOOD PROPERTY TRUST, INC. (XNYS:STWD)
Sector:
154.37M
Industry:
REIT�Mortgage
CEO:
Mr. Barry Sternlicht
Total Employees:
277
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF STARWOOD PROPERTY TRUST, INC.(STWD) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND REIT�MORTGAGE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
22.45
One Month Price Target:
$22.64
Six Month Price Target :
$23.57
Likely Price in One Year's Time:
Ticker:
$24.69
Likely Trading Range Today Under (Normal Volatility)
$22.34
Price Upper limit ($) :
$22.57
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$21.04
This week:
$19.3
This month :
$16.15
Other Primary facts
Market Cap:
7.02B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
309.22M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
26.07%
-21.99%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$28.99
$26.00
$15.91
$18.90
Medium risk (<10%) entry points
Buy Call
Sell Call
$25.03
Buy Put:
Sell Put:
$24.39
$19.86
$20.51
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
STWD
Sharpe Ratio:
0.79%
Comparison:
STWD, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -253.92% lower than the industry
& is -65.49% lower than the market/S&P 500 average
Average Returns/Yield of
STWD
Daily returns:
0.03%
Weekly returns:
0.17%
Monthly returns:
0.66%
Yearly returns:
-0.12%
Comparison of returns:
Average annual returns/yield (last 3 years) is -6817.50% below industry average
Classification:
STWD, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.86
Statistical test of Returns:
STWD has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.07%
Weekly Volatility:
6.87%
Monthly Volatility:
13.73%
Yearly Volatility:
47.58%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.97%
Volatility in last five trading days has been -68.55% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.27%
Weekly VaR:
-14.03%
Monthly VaR:
-28.06%
How Much Can the price of
STWD
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-24%
Worst case (decline):
>85%
This translates to price declining to:
$16.96
This translates to price declining to:
$3.37
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
STWD is a 98.05% riskier investment compared to the market/S&P 500 & is 69.67% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 1.14% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
STWD
Beta in relation to market/S&P 500--1.49
Expected beta in 1 year's time:
0.911
Expected beta in 3 year's time:
1.289
Unlevered (debt free) Beta:
0.668
Beta in relation to Nasdaq (XNAS):
0.775
Beta in relation to all global stocks::
0.772
Beta Comparison & Analysis
Beta of competitors/peers::
0.94
Beta is 58.12% higher than peers
Average Industry Beta:
1.365
Beta is 8.94% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.054
Alpha is -57.10% below industry average alpha yield
Alpha is -345% below the market average
Analysis of Cost of Capital of
STWD
Equity cost of capital:
0.133
Equity cost of capital is 6.69% above industry mean WACC
Unlevered (without debt) cost of capital:
5.99%
Before-tax cost of debt:
5.36%
After-tax cost of debt:
4.24%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.24%
WACC is 8.01% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$3.70
Revenue growth rate per share of (3Y):
1
Annual revenue growth rate is -95.74% below industry average
EPS:
$2.16
Expected Annual growth rate of EPS (3Y):
-5.59%
Expected future EPS growth rate is 19370.56% higher than the REIT�Mortgage industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: 4.71%
Equity growth rate per share is -123.24% lower than the industry
Debt per share
$25.06
EBITDA per share
$3.91
Valuation Analysis Today of
STWD
P/E Ratio:
9.24
P/E Ratio of Competitors/Peers:
27.4
P/E ratio is -66.29% lower than main peers & is -0.31% lower than the industry
Stock price/value with industry average P/E ratio: $20.02
STWD is 12.16% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $25.80
Present value of the expected future dividends only: $14.40
P/S (Price to Sales ratio):
6.06
Price to sales ratio is 11.38% above the industry mean
P/B (Price to book value ratio):
1
-
-
Net income growth rate (3Y):
11.87%
Net income growth rate is -98.50% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 22.20%
Dividend yeild: 8.55%
Previous Dividend: $0.48
Previous adjusted dividend: $0.48
Previous Dividend: $1.92
-
-
Average dividend payment (long-term): $0.48
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 13/10/2022
Expected next dividend record date: 28/09/2022
-
Previous dividend payment date: 15/07/2022
Previous dividend record date: 30/06/2022
-
Dividend History:
2022-06-29--$0.48
2021-12-30--$0.48
2021-06-29--$0.48
2022-03-30--$0.48
2021-09-29--$0.48
2021-03-30--$0.48
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
123.37%
Net debt to equity ratio:
134.84%
Debt to assets ratio:
9.54%
Net debt to assets ratio:
10.43%
Debt-to-asset ratio is 23.81% above industry average
Ability to repay debt:
Interest coverage ratio:
2.58
Interest coverage ratio is 2429.82% more than industry average
Looking forward:
Debt growth rate:
6.84%
Annual debt growth is -1003% lower than industry average debt growth rate
Debt repayment rate in last quarter: 40.34%
Analysis of Key Statistics
Correlation of price movement with the market:
0.587
Statistical significance of correlation:
STWD has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.543
Stock price is 7.98% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.543
Correlation of price movement with Nasdaq (^IXIC):
0.052
Covariance of price movement with the market:
0.092
Kurtosis
18.549
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.285
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
STWD
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
43.76%
Operating profit margin is -38.05% lower than the industry
Net Profit Margin Ratio:
100%
Effective Tax Rate:
0.53%
Effective tax rate is -89.87% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
10.53%
Return on equity (ROE) is -13.66% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.81%
Return on assets (ROA) is -92.53% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 1.6 years
Stock based compensation to net income ratio:
1.53%
In-depth Efficiency Analysis
Revenue generated per employee:
4.1M
Each employee generates 216% more revenue than industry average revenue per employee
EBITDA generated per employee:
4.4M
Each employee generates -76% less EBITDA than industry average revenue per employee
Profit generated per employee:
2.4M
Each employee generates -86% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
557.3K
Each employee generates -78% less free cash flow than industry average revenue per employee
Assets/Capital per employee
0.0K
Each employee generates -78% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
STWD
BRIXMOR PROPERTY GROUP INC. (XNYS:BRX)
OMEGA HEALTHCARE INVESTORS, INC. (XNYS:OHI)
CORESITE REALTY CORPORATION (XFRA:07H)
STAG INDUSTRIAL, INC. (XNYS:STAG)
HEALTHCARE REALTY TRUST INCORPORATED (XNYS:HR)
WEWORK INC. (XNYS:WE)
FIRST INDUSTRIAL REALTY TRUST, INC. (XNYS:FR)
AMERICOLD REALTY TRUST, INC. (XNYS:COLD)
KILROY REALTY CORPORATION (XNYS:KRC)
Current Analyst Ratings
Strong buy�4%
Buy�21%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.14B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
208.19M
-
361.32M
361.32M
-
111.43M
171.30M
890.88M
468.16M
74.82M
1.21B
501.10M
660.96M
758.20M
3.99M
660.96M
Statement of Cash Flow
Date:
Period:
12.76M
Differed Income Tax :
-
Stock Based Compensation :
10.09M
Change in Working Capital :
- 55018.00K
Accounts Receivables:
- 35342.00K
Other Working Capital:
-
Other Non-Cash Items:
- 197772.00K
Net Cash Provided by Operating Activities:
154.37M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 27141.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
264.21M
-
264.21M
123.80M
-
-
-
-
259.85M
62.15M
2.22B
-
-
-
81.19B
81.19B
196.15M
984.05M
-
-
-
1.18B
7.75B
-
7.75B
80.85B
74.28B
3.14M
669.88M
35.7M
5.57B
March 31, 2022 at 6:00:00 AM
989.06M
6.28B
80.56B
-
8.73B
8.5B
90.38M
- 618001.00K
- 554762.00K
- 5238098.00K
251.00K
-
- 146709.00K
5.84B
452.51M
- 262.00K
51.86M
373.77M
321.91M
154.37M
-
154.37M
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
STWD
2023
2024
2025
2026
2027
$24.81
$37.52
$41.27
$45.39
$49.93