Traders Purchase Large Volume of Rithm Capital Call Options (NYSE:RITM)

Key Points

• Rithm Capital call-option activity surged: Traders purchased 13,580 call options, about 541% above the typical volume of 2,119 contracts.
• The stock gained while maintaining a high dividend yield: RITM shares rose to $10.29, and the company’s quarterly dividend of $0.25 per share equates to an annualized yield of approximately 9.7%.
• Analyst sentiment remains favorable: Ten analysts rate Rithm Capital a Buy and one rates it Hold, producing a consensus “Moderate Buy” rating and an average price target of $13.20 versus the current share price.

Rithm Capital Corp. (NYSE:RITM - Get Free Report) saw unusually large options trading activity on Tuesday. Traders bought 13,580 call options on the company. This represents an increase of 541% compared to the typical volume of 2,119 call options.

Insider Activity at Rithm Capital

In other news, Director David Saltzman sold 80,922 shares of the firm's stock in a transaction dated Wednesday, May 20th. The stock was sold at an average price of $9.25, for a total value of $748,528.50. Following the completion of the transaction, the director owned 44,248 shares in the company, valued at $409,294. This trade represents a 64.65% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. 0.57% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently bought and sold shares of the stock. Los Angeles Capital Management LLC acquired a new stake in Rithm Capital during the fourth quarter worth approximately $26,000. Garton & Associates Financial Advisors LLC bought a new position in shares of Rithm Capital during the fourth quarter worth approximately $31,000. Altshuler Shaham Ltd increased its stake in shares of Rithm Capital by 100.0% during the first quarter. Altshuler Shaham Ltd now owns 3,600 shares of the real estate investment trust's stock worth $34,000 after purchasing an additional 1,800 shares during the period. Torren Management LLC acquired a new stake in Rithm Capital during the 4th quarter worth approximately $35,000. Finally, Bogart Wealth LLC lifted its holdings in Rithm Capital by 108.5% during the 1st quarter. Bogart Wealth LLC now owns 4,120 shares of the real estate investment trust's stock worth $39,000 after purchasing an additional 2,144 shares during the last quarter. Institutional investors and hedge funds own 44.92% of the company's stock.

Rithm Capital Stock Performance

Shares of RITM stock traded up $0.18 during trading on Tuesday, reaching $10.29. 1,217,671 shares of the company's stock were exchanged, compared to its average volume of 8,313,320. Rithm Capital has a twelve month low of $8.43 and a twelve month high of $12.74. The firm's fifty day moving average price is $9.37 and its 200-day moving average price is $9.77. The company has a quick ratio of 0.76, a current ratio of 0.76 and a debt-to-equity ratio of 2.19. The stock has a market capitalization of $5.75 billion, a PE ratio of 17.16 and a beta of 1.14.

Rithm Capital (NYSE:RITM - Get Free Report) last announced its quarterly earnings results on Tuesday, July 28th. The real estate investment trust reported $0.60 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.50 by $0.10. Rithm Capital had a return on equity of 19.86% and a net margin of 9.20%. As a group, sell-side analysts anticipate that Rithm Capital will post 2.22 EPS for the current year.

Rithm Capital Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Friday, July 31st. Stockholders of record on Thursday, July 2nd were paid a dividend of $0.25 per share. This represents a $1.00 dividend on an annualized basis and a dividend yield of 9.7%. The ex-dividend date was Thursday, July 2nd. Rithm Capital's dividend payout ratio (DPR) is currently 166.67%.

Analyst Upgrades and Downgrades

A number of research analysts have weighed in on RITM shares. Wall Street Zen upgraded Rithm Capital from a "sell" rating to a "hold" rating in a research note on Saturday, August 1st. Royal Bank Of Canada dropped their price objective on Rithm Capital from $14.00 to $13.00 and set an "outperform" rating on the stock in a research note on Friday, May 1st. BTIG Research cut their price objective on Rithm Capital from $16.00 to $13.00 and set a "buy" rating for the company in a report on Tuesday, June 16th. Citizens Jmp raised their target price on shares of Rithm Capital from $12.50 to $13.50 and gave the company a "market outperform" rating in a research note on Wednesday, May 20th. Finally, Piper Sandler lowered their target price on shares of Rithm Capital from $14.00 to $12.50 and set an "overweight" rating on the stock in a report on Thursday, July 2nd. Ten research analysts have rated the stock with a Buy rating and one has given a Hold rating to the stock. According to MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and an average price target of $13.20.

About Rithm Capital

Rithm Capital Corporation is a specialty finance company that originates, acquires and manages structured credit investments collateralized by real estate assets in the United States. The company focuses primarily on senior floating-rate loans secured by multifamily, commercial, industrial and single-family rental properties, aiming to deliver attractive risk-adjusted yields through a diversified portfolio of floating-rate real estate debt.

In addition to senior loans, Rithm Capital invests in residential mortgage-backed securities, including agency and non-agency pools, as well as other real estate-related credit instruments.

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