Rithm (RITM) finished the last trading day at $11.82, which is an increase of 1.81% compared to the day before.
Rithm Capital announced impressive earnings for the fourth quarter, thanks to solid revenue from servicing and asset management. The company's varied portfolio, which includes mortgage servicing rights and residential loans, resulted in a dividend coverage ratio of 2.4X, highlighting its strong yield potential. With a price-to-book ratio of 0.97X, Rithm Capital presents a compelling investment option.
Rithm Capital Corp. is buying back 32% of its Series A preferred shares, which lowers risk and gives these securities a clear maturity timeline. Originally issued in 2019, the Series A shares will now have a shorter lifespan of about 1 to 2 years, offering attractive yields. This buyback shows Rithm's plan to eliminate costly capital, making the remaining Series A shares a safer and more profitable investment.
Rithm Capital: This very secure investment with an 8% return is still available at a discount.
Rithm Capital Corp. is currently priced below its book value and provides a high dividend yield of more than 8%, with the possibility of future increases. Its varied portfolio, which includes residential mortgages, construction loans, and asset management, puts it in a good position for growth, especially when interest rates are low. Although there are risks from changing interest rates and credit spreads, RITM's smart use of capital and profitability make it an attractive option for long-term investors.
RITM's results for the fourth quarter show an increase in net servicing revenue and interest income. However, high expenses somewhat balance out these positive factors.
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NEW YORK--(BUSINESS WIRE)--Rithm Capital Corp. (NYSE: RITM) has announced its financial results for the fourth quarter and the entire year ending December 31, 2024. In the fourth quarter, the company reported a GAAP net income of $263.2 million, which is $0.50 per diluted share, and earnings available for distribution of $315.8 million, or $0.60 per diluted share. Additionally, Rithm declared a common dividend of $130.2 million, equating to $0.25 per share.
RITM's earnings for the fourth quarter are expected to have benefited from increased interest income and revenue from asset management.
Rithm Capital is a varied mREIT that has a strong presence in the real estate market, concentrating on origination, servicing, and investment areas. As of now, Rithm Capital is considered a hold based on its intrinsic value, mainly due to the significant influence of outside factors. Even with the risks from interest rates, Rithm's internal protections and diverse income streams offer stability, achieving around 25% operating margins after adjustments.