Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Redwood Trust, Inc. (NYSE:RWT) due to its excellent fundamentals in more than one area. RWT is a well-regarded dividend payer with a buoyant future outlook, not yet factored into the price. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Redwood Trust here.
Undervalued with reasonable growth potential and pays a dividend
RWT's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of RWT's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, RWT's share price is trading below the group's average. This supports the theory that RWT is potentially underpriced.
RWT's high dividend payments make it one of the best dividend stocks on the market, and it has also been able to maintain it at a level in which net income is able to cover dividend payments.
For Redwood Trust, there are three relevant factors you should further examine:
- Historical Performance: What has RWT's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of RWT? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.