Rithm Capital (NYSE:RITM) Hits New 12-Month Low - Should You Sell?

Key Points

• Rithm Capital shares fell to a new 52-week low of $8.42, below the 50-day and 200-day moving averages, signaling continued price weakness.
• Analyst sentiment remains broadly positive despite several price-target cuts: 10 analysts rate the stock Buy and one rates it Sell, with a consensus “Moderate Buy” rating and a $13.15 target.
• The REIT reported quarterly EPS of $0.60, exceeding estimates, and maintains a $0.25 quarterly dividend—a 11.8% yield—but its 166.67% payout ratio raises questions about dividend sustainability.

Shares of Rithm Capital Corp. (NYSE:RITM - Get Free Report) reached a new 52-week low on Wednesday. The company traded as low as $8.42 and last traded at $8.4250, with a volume of 3077686 shares. The stock had previously closed at $8.66.

Wall Street Analyst Weigh In

A number of equities research analysts have commented on RITM shares. Piper Sandler decreased their price objective on Rithm Capital from $14.00 to $12.50 and set an "overweight" rating for the company in a report on Thursday, July 2nd. BTIG Research cut their target price on Rithm Capital from $16.00 to $13.00 and set a "buy" rating on the stock in a report on Tuesday, June 16th. UBS Group decreased their price target on shares of Rithm Capital from $14.50 to $14.00 and set a "buy" rating for the company in a research note on Friday, August 21st. Weiss Ratings downgraded shares of Rithm Capital from a "hold (c-)" rating to a "sell (d+)" rating in a report on Friday. Finally, Wall Street Zen upgraded shares of Rithm Capital from a "sell" rating to a "hold" rating in a report on Saturday, August 1st. Ten equities research analysts have rated the stock with a Buy rating and one has assigned a Sell rating to the company's stock. According to MarketBeat.com, Rithm Capital currently has a consensus rating of "Moderate Buy" and a consensus target price of $13.15.

Rithm Capital Price Performance

The company has a current ratio of 0.76, a quick ratio of 0.76 and a debt-to-equity ratio of 2.19. The firm has a market capitalization of $4.72 billion, a PE ratio of 14.09, a price-to-earnings-growth ratio of 0.55 and a beta of 1.16. The business has a 50-day moving average of $9.79 and a 200 day moving average of $9.55.

Rithm Capital (NYSE:RITM - Get Free Report) last announced its earnings results on Tuesday, July 28th. The real estate investment trust reported $0.60 EPS for the quarter, beating the consensus estimate of $0.50 by $0.10. Rithm Capital had a net margin of 9.20% and a return on equity of 19.86%. As a group, research analysts anticipate that Rithm Capital Corp. will post 2.26 EPS for the current fiscal year.

Rithm Capital Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Friday, October 30th. Shareholders of record on Thursday, October 1st will be paid a $0.25 dividend. The ex-dividend date is Thursday, October 1st. This represents a $1.00 annualized dividend and a yield of 11.8%. Rithm Capital's dividend payout ratio (DPR) is 166.67%.

Insider Activity at Rithm Capital

In other news, Director Peggy Hebard sold 14,520 shares of the business's stock in a transaction that occurred on Thursday, August 20th. The stock was sold at an average price of $10.18, for a total value of $147,813.60. Following the transaction, the director owned 82,259 shares in the company, valued at $837,396.62. The trade was a 15.00% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. 0.57% of the stock is currently owned by corporate insiders.

Institutional Trading of Rithm Capital

A number of hedge funds have recently bought and sold shares of the business. Cetera Investment Advisers raised its stake in shares of Rithm Capital by 26.9% in the first quarter. Cetera Investment Advisers now owns 1,447,552 shares of the real estate investment trust's stock valued at $13,723,000 after buying an additional 306,615 shares during the period. BlueCrest Capital Management Ltd lifted its holdings in Rithm Capital by 37.8% during the second quarter. BlueCrest Capital Management Ltd now owns 2,046,427 shares of the real estate investment trust's stock valued at $19,216,000 after purchasing an additional 561,819 shares during the last quarter. Squarepoint Ops LLC bought a new position in Rithm Capital during the second quarter worth about $2,574,000. Family Manage LLC boosted its position in Rithm Capital by 62.1% during the first quarter. Family Manage LLC now owns 487,557 shares of the real estate investment trust's stock worth $4,622,000 after purchasing an additional 186,816 shares during the period. Finally, VIRGINIA RETIREMENT SYSTEMS ET Al purchased a new position in shares of Rithm Capital in the second quarter worth about $22,001,000. 44.92% of the stock is currently owned by institutional investors.

About Rithm Capital

Rithm Capital Corp. NYSE: RITM is a real estate investment trust and asset management company focused primarily on the residential real estate and mortgage markets. The company invests in and manages mortgage servicing rights, residential mortgage loans, mortgage-backed securities and other real estate-related assets.

Rithm also operates businesses involved in mortgage origination, loan servicing and related financial services. Through its platforms and investments, the company provides financing and servicing solutions connected with residential real estate and manages assets across the housing market.

The company was formerly known as New Residential Investment Corp.

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