Redwood Trust, Inc. (NYSE:RWT) Given Average Recommendation of "Moderate Buy" by Analysts

Key Points

• Redwood Trust, Inc. has received a consensus recommendation of "Moderate Buy" from seven brokerages, with an average 12-month price target of $7.25.
• Recent changes in analyst ratings include Wall Street Zen downgrading the stock to "strong sell" and JPM Securities lowering their price objective from $7.50 to $7.00.
• The company has declared a quarterly dividend of $0.18, which translates to an annualized yield of 11.5%, despite a payout ratio of -112.50%.

Shares of Redwood Trust, Inc. (NYSE:RWT - Get Free Report) have earned a consensus rating of "Moderate Buy" from the seven analysts that are covering the firm, Marketbeat.com reports. Three research analysts have rated the stock with a hold rating, three have assigned a buy rating and one has issued a strong buy rating on the company. The average 1 year price target among brokers that have issued a report on the stock in the last year is $7.25.

Several research firms have weighed in on RWT. JMP Securities lowered their target price on Redwood Trust from $7.50 to $7.00 and set a "market outperform" rating on the stock in a research note on Thursday, July 31st. Wall Street Zen cut Redwood Trust from a "hold" rating to a "strong sell" rating in a research note on Saturday, August 2nd. UBS Group lifted their target price on Redwood Trust from $6.50 to $7.00 and gave the company a "buy" rating in a research note on Wednesday, September 3rd. Finally, Keefe, Bruyette & Woods lowered their target price on Redwood Trust from $6.50 to $5.75 and set a "market perform" rating on the stock in a research note on Tuesday, August 5th.

Institutional Investors Weigh In On Redwood Trust

Several institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Nomura Holdings Inc. lifted its holdings in Redwood Trust by 220.3% in the 2nd quarter. Nomura Holdings Inc. now owns 120,316 shares of the real estate investment trust's stock worth $711,000 after purchasing an additional 220,316 shares during the last quarter. Public Sector Pension Investment Board lifted its holdings in shares of Redwood Trust by 8.0% during the second quarter. Public Sector Pension Investment Board now owns 453,773 shares of the real estate investment trust's stock worth $2,682,000 after buying an additional 33,518 shares during the last quarter. CANADA LIFE ASSURANCE Co lifted its holdings in shares of Redwood Trust by 6.5% during the second quarter. CANADA LIFE ASSURANCE Co now owns 164,791 shares of the real estate investment trust's stock worth $973,000 after buying an additional 10,101 shares during the last quarter. Tower Research Capital LLC TRC lifted its holdings in shares of Redwood Trust by 136.9% during the second quarter. Tower Research Capital LLC TRC now owns 10,823 shares of the real estate investment trust's stock worth $64,000 after buying an additional 6,255 shares during the last quarter. Finally, Vident Advisory LLC acquired a new position in shares of Redwood Trust during the second quarter worth approximately $246,000. 74.34% of the stock is currently owned by institutional investors and hedge funds.

Redwood Trust Stock Performance

Shares of NYSE RWT traded up $0.05 during midday trading on Friday, reaching $6.08. 785,852 shares of the company traded hands, compared to its average volume of 812,192. Redwood Trust has a 52 week low of $4.68 and a 52 week high of $8.15. The stock has a 50-day moving average price of $5.99 and a 200 day moving average price of $5.89. The company has a debt-to-equity ratio of 20.00, a current ratio of 40.39 and a quick ratio of 40.39. The company has a market cap of $785.68 million, a price-to-earnings ratio of -9.50 and a beta of 1.37.

Redwood Trust (NYSE:RWT - Get Free Report) last issued its quarterly earnings results on Wednesday, July 30th. The real estate investment trust reported $0.18 EPS for the quarter, missing the consensus estimate of $0.19 by ($0.01). The business had revenue of ($38.10) million during the quarter, compared to the consensus estimate of $31.00 million. Redwood Trust had a positive return on equity of 8.70% and a negative net margin of 6.93%. Sell-side analysts anticipate that Redwood Trust will post 0.78 earnings per share for the current fiscal year.

Redwood Trust Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Tuesday, September 30th. Investors of record on Tuesday, September 23rd will be issued a $0.18 dividend. This represents a $0.72 annualized dividend and a yield of 11.8%. The ex-dividend date is Tuesday, September 23rd. Redwood Trust's payout ratio is -112.50%.

About Redwood Trust

Redwood Trust, Inc, together with its subsidiaries, operates as a specialty finance company in the United States. The company operates through three segments: Residential Consumer Mortgage Banking, Residential Investor Mortgage Banking, and Investment Portfolio. The Residential Consumer Mortgage Banking segment operates a mortgage loan conduit that acquires residential loans from third-party originators for subsequent sale, securitization, or transfer to its investment portfolio.