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Exclusive Story Starwood Shares Have Struggled, but Catalysts Could Signal a TurnWritten by Jennifer Ryan Woods. Date Posted: 3/31/2026. 
Key Points - Starwood Property Trust has been under pressure from rising interest rates and company-specific challenges, with the stock down more than 30% over the past five years and lagging its peers over the last year.
- Inconsistent earnings, repeated revenue misses, and uneven dividend coverage have weighed on investor sentiment, even as the company has maintained its high dividend payout.
- Recent developments, including a stronger earnings report, improving commentary around dividend coverage, and a newly authorized share buyback, could help shift sentiment if the company delivers more consistent results.
- Special Report: Elon's "Hidden" Company
Over the last several years, the higher-interest-rate environment has been a persistent headwind for commercial real estate, and Starwood Property Trust (NYSE: STWD) has been no exception. The real estate investment trust (REIT)—which specializes in originating, acquiring, and managing commercial mortgage loans and other real estate-related investments—has seen its stock trend meaningfully lower over the last five years. The past year has been challenging for the company, driven by disappointing revenue, declines in book value per share (BVPS), and several quarters in which earnings failed to cover its dividend. However, the tide may be turning: a mix of recent developments could signal near-term upside. Pandemic Pressure Followed by Rising Rates Pressured Shares Starwood's troubles began during the COVID‑19 pandemic, when shares plunged in early 2020, falling from around $26 to below $10 as mortgage REITs were hit by liquidity concerns and uncertainty across commercial real estate markets. While shares rebounded to pre-pandemic levels by mid‑2021 as investor confidence returned, new headwinds emerged. When rates began rising in March 2022, property values declined and lending margins tightened, once again pressuring commercial mortgage REITs. The impact on STWD has been significant, with shares down more than 30% over the past five years. Starwood was not alone: competitors such as Ares Commercial Real Estate (NYSE: ACRE), Blackstone Mortgage Trust (NYSE: BXMT), and Apollo Commercial Real Estate Finance (NYSE: ARI) also declined roughly 65%, 40%, and 27%, respectively, over the same period. Over the last year, Starwood underperformed the group. The stock has fallen roughly 12% over the past 12 months, and at a recent trading price around $17.37 it has been flirting with the 52‑week low hit in April 2025. The stock has also lagged the broader REIT industry, which is down under 12%, and has been notably weaker than many of its closest peers. Over the past 12 months, Ares shares have risen about 4.75%, Blackstone Mortgage Trust is down roughly 3.65%, and Apollo Commercial Real Estate Finance is up more than 10%. Inconsistent Earnings and Dividend Coverage Weigh on Sentiment One issue weighing on Starwood is inconsistent results. EPS has beaten expectations in four of the last six quarters, while revenue missed in five of those six periods. The company has also reported negative net interest income in certain quarters, which has hurt sentiment. Starwood's dividend has added to investor concern. For more than a decade the REIT has maintained its quarterly dividend of $0.48 per share, which currently yields about 11.26%. But over the past four quarters earnings have not fully covered the dividend, producing a payout ratio of roughly 165%—a level that investors view as unsustainable. Against the still-challenging higher‑rate backdrop, the combination of mixed earnings and uneven dividend coverage has made some investors cautious. Still, several recent developments could help reignite optimism: better-than-expected revenue for the first time in a while, positive company commentary on dividend coverage, and a newly authorized share repurchase program. Stronger Results and a Potential Buyback Could Shift Sentiment In Starwood's Q4 2025 earnings report, released Feb. 25, the REIT reported EPS of $0.42, beating analyst estimates by $0.01. Revenue of $492.95 million came in roughly $23 million above estimates, marking a reversal after several consecutive revenue misses. Starwood said it has strengthened its balance sheet, having raised $4.4 billion in capital and ending the year with $1.4 billion in liquidity. While EPS did not cover the $0.48 quarterly dividend, management said on the earnings call that it expects dividend coverage to improve steadily throughout the year. Despite these positives, a continued decline in BVPS remains a concern. After the earnings release, the company announced its board had authorized the repurchase of up to $400 million of outstanding common stock and convertible notes over the next 12 months using existing cash. A buyback of up to roughly 6% of shares outstanding could meaningfully boost earnings per share and provide support for the stock if executed. Wall Street Is Waiting for Clearer Signs of Improvement The market reaction to the fourth-quarter report and the buyback announcement was mixed. Shares rose roughly 2% on higher-than-normal volume, though two analysts lowered their price targets while maintaining Outperform ratings on the stock. Currently, four analysts rate the stock a Hold and three rate it a Buy. The average 12‑month price target implies nearly 16% upside. Wall Street may remain cautious for now, but the outlook could become more bullish if Starwood delivers another quarter of strong earnings and revenue, improves dividend coverage, and begins actively repurchasing shares. | 
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