Why Redwood Trust Is Poised to Outperform

Before you go, we thought you'd like these...
Before you go close icon

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, mortgage REIT Redwood Trust has earned a respected four-star ranking.

With that in mind, let's take a closer look at Redwood and see what CAPS investors are saying about the stock right now.

Redwood facts

Headquarters (founded)

Mill Valley, Calif. (1994)

Market Cap

$1.6 billion


Mortgage REITs

Trailing-12-Month Revenue

$156.4 million


CEO Martin Hughes
CFO Christopher Abate

Return on Equity (average, past 3 years)


Cash / Debt

$208.0 million / $4.1 billion

Dividend Yield



Capstead Mortgage
iStar Financial

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 77% of the 197 members who have rated Redwood believe the stock will outperform the S&P 500 going forward.   

Just last week, one of those Fools, InveniamViam, succinctly summed up the Redwood bull case for our community:

Very well run REIT. RWT has beaten earnings 6 of the last 6 quarters. They are consistently conservative in their estimates and sell side analysts still have not given them credit for the work they have done improving earnings over the past few years. ...

I expect analyst upgrades and positive revisions to the earnings estimates to come quickly. I believe earnings this year will be close to $2.50 per share. With a very conservative P/E of 10 that would put the target price at $25 (on the low end). Consider that you can also sit and collect the 6% dividend while you wait for the market to [properly] value this issue.

Dividend stocks can make you rich. It's as simple as that. While they don't garner the notoriety of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

The article Why Redwood Trust Is Poised to Outperform originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

People are Reading