RITHM CAPITAL CORP (RITM) Stock Fundamental Analysis
NYSE:RITM - New York Stock Exchange, Inc. - US64828T2015 - REIT - Currency: USD
RITM gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 64 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. While RITM belongs to the best of the industry regarding profitability, there are concerns on its financial health. RITM is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
RITM had positive earnings in the past year.
RITM had a negative operating cash flow in the past year.
RITM had positive earnings in 4 of the past 5 years.
RITM had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 1.81%, RITM belongs to the best of the industry, outperforming 90.63% of the companies in the same industry.
Looking at the Return On Equity, with a value of 10.71%, RITM belongs to the top of the industry, outperforming 90.63% of the companies in the same industry.
With an excellent Return On Invested Capital value of 2.30%, RITM belongs to the best of the industry, outperforming 90.63% of the companies in the same industry.
RITM had an Average Return On Invested Capital over the past 3 years of 4.23%. This is above the industry average of 1.76%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.81% | ||
| ROE | 10.71% | ||
| ROIC | 2.3% |
ROA(3y)1.94%
ROA(5y)0.64%
ROE(3y)10.26%
ROE(5y)2.79%
ROIC(3y)4.23%
ROIC(5y)N/A
1.3 Margins
The Profit Margin of RITM (16.37%) is better than 71.88% of its industry peers.
RITM's Profit Margin has declined in the last couple of years.
With a decent Operating Margin value of 24.75%, RITM is doing good in the industry, outperforming 75.00% of the companies in the same industry.
RITM's Operating Margin has improved in the last couple of years.
RITM has a better Gross Margin (64.02%) than 92.19% of its industry peers.
In the last couple of years the Gross Margin of RITM has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.75% | ||
| PM (TTM) | 16.37% | ||
| GM | 64.02% |
OM growth 3Y-5.32%
OM growth 5Y6.2%
PM growth 3Y-5.6%
PM growth 5Y-6.97%
GM growth 3Y-8.52%
GM growth 5Y8.93%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so RITM is destroying value.
Compared to 1 year ago, RITM has more shares outstanding
RITM has more shares outstanding than it did 5 years ago.
The debt/assets ratio for RITM is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.01, we must say that RITM is in the distress zone and has some risk of bankruptcy.
RITM has a Altman-Z score (0.01) which is in line with its industry peers.
RITM has a Debt/Equity ratio of 4.19. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 4.19, RITM is in line with its industry, outperforming 51.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.19 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.01 |
ROIC/WACC0.36
WACC6.4%
2.3 Liquidity
A Current Ratio of 0.16 indicates that RITM may have some problems paying its short term obligations.
RITM has a Current ratio (0.16) which is in line with its industry peers.
RITM has a Quick Ratio of 0.16. This is a bad value and indicates that RITM is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of RITM (0.16) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.16 | ||
| Quick Ratio | 0.16 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.46% over the past year.
RITM shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -0.75% yearly.
The Revenue has grown by 39.41% in the past year. This is a very strong growth!
The Revenue has been growing by 16.85% on average over the past years. This is quite good.
EPS 1Y (TTM)1.46%
EPS 3Y11.94%
EPS 5Y-0.75%
EPS Q2Q%17.65%
Revenue 1Y (TTM)39.41%
Revenue growth 3Y12.06%
Revenue growth 5Y16.85%
Sales Q2Q%7.91%
3.2 Future
Based on estimates for the next years, RITM will show a small growth in Earnings Per Share. The EPS will grow by 1.14% on average per year.
The Revenue is expected to grow by 12.56% on average over the next years. This is quite good.
EPS Next Y-2.71%
EPS Next 2Y1.2%
EPS Next 3Y1.14%
EPS Next 5YN/A
Revenue Next Year4.87%
Revenue Next 2Y9.12%
Revenue Next 3Y12.56%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 5.72, the valuation of RITM can be described as very cheap.
Based on the Price/Earnings ratio, RITM is valued cheaper than 93.75% of the companies in the same industry.
When comparing the Price/Earnings ratio of RITM to the average of the S&P500 Index (29.75), we can say RITM is valued rather cheaply.
With a Price/Forward Earnings ratio of 5.88, the valuation of RITM can be described as very cheap.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RITM indicates a rather cheap valuation: RITM is cheaper than 92.19% of the companies listed in the same industry.
RITM is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.72 | ||
| Fwd PE | 5.88 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
The decent profitability rating of RITM may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y1.2%
EPS Next 3Y1.14%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 8.30%, RITM is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 12.95, RITM's dividend is way lower than its industry peers. On top of this 92.19% of the companies listed in the same industry pay a better dividend than RITM!
Compared to an average S&P500 Dividend Yield of 2.30, RITM pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.3% |
5.2 History
The dividend of RITM decreases each year by -10.86%.
RITM has been paying a dividend for at least 10 years, so it has a reliable track record.
RITM has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-10.86%
Div Incr Years0
Div Non Decr Years3
5.3 Sustainability
70.42% of the earnings are spent on dividend by RITM. This is not a sustainable payout ratio.
DP70.42%
EPS Next 2Y1.2%
EPS Next 3Y1.14%
11.95
-0.2 (-1.65%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners50.69%
Inst Owner ChangeN/A
Ins Owners0.12%
Ins Owner Change-4.03%
Market Cap6.22B
Analysts84.44
Price Target13.49 (12.89%)
Short Float %0.83%
Short Ratio1.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.3% |
Yearly Dividend1.17
Dividend Growth(5Y)-10.86%
DP70.42%
Div Incr Years0
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)29.55%
Min EPS beat(2)26.42%
Max EPS beat(2)32.68%
EPS beat(4)4
Avg EPS beat(4)23.52%
Min EPS beat(4)8.8%
Max EPS beat(4)32.68%
EPS beat(8)8
Avg EPS beat(8)31.37%
EPS beat(12)12
Avg EPS beat(12)22.53%
EPS beat(16)13
Avg EPS beat(16)17.94%
Revenue beat(2)2
Avg Revenue beat(2)7.6%
Min Revenue beat(2)0.1%
Max Revenue beat(2)15.11%
Revenue beat(4)2
Avg Revenue beat(4)1.95%
Min Revenue beat(4)-4.53%
Max Revenue beat(4)15.11%
Revenue beat(8)4
Avg Revenue beat(8)2.9%
Revenue beat(12)8
Avg Revenue beat(12)186.65%
Revenue beat(16)12
Avg Revenue beat(16)207.64%
PT rev (1m)1.04%
PT rev (3m)0.59%
EPS NQ rev (1m)1.37%
EPS NQ rev (3m)4.28%
EPS NY rev (1m)2.43%
EPS NY rev (3m)4.5%
Revenue NQ rev (1m)0.1%
Revenue NQ rev (3m)-2.55%
Revenue NY rev (1m)2.73%
Revenue NY rev (3m)2.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.72 | ||
| Fwd PE | 5.88 | ||
| P/S | 1.22 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.8 | ||
| P/tB | 0.85 | ||
| EV/EBITDA | N/A |
EPS(TTM)2.09
EY17.49%
EPS(NY)2.03
Fwd EY17.02%
FCF(TTM)-5.08
FCFYN/A
OCF(TTM)-4.2
OCFYN/A
SpS9.8
BVpS14.97
TBVpS14.08
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.81% | ||
| ROE | 10.71% | ||
| ROCE | 3.83% | ||
| ROIC | 2.3% | ||
| ROICexc | 2.38% | ||
| ROICexgc | 2.54% | ||
| OM | 24.75% | ||
| PM (TTM) | 16.37% | ||
| GM | 64.02% | ||
| FCFM | N/A |
ROA(3y)1.94%
ROA(5y)0.64%
ROE(3y)10.26%
ROE(5y)2.79%
ROIC(3y)4.23%
ROIC(5y)N/A
ROICexc(3y)4.41%
ROICexc(5y)N/A
ROICexgc(3y)4.66%
ROICexgc(5y)N/A
ROCE(3y)7.86%
ROCE(5y)N/A
ROICexcg growth 3Y2.15%
ROICexcg growth 5Y24.98%
ROICexc growth 3Y1.4%
ROICexc growth 5Y23.9%
OM growth 3Y-5.32%
OM growth 5Y6.2%
PM growth 3Y-5.6%
PM growth 5Y-6.97%
GM growth 3Y-8.52%
GM growth 5Y8.93%
F-Score5
Asset Turnover0.11
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.19 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | 8.98% | ||
| Interest Coverage | 0.73 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.16 | ||
| Quick Ratio | 0.16 | ||
| Altman-Z | 0.01 |
F-Score5
WACC6.4%
ROIC/WACC0.36
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)6.14%
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)1.46%
EPS 3Y11.94%
EPS 5Y-0.75%
EPS Q2Q%17.65%
EPS Next Y-2.71%
EPS Next 2Y1.2%
EPS Next 3Y1.14%
EPS Next 5YN/A
Revenue 1Y (TTM)39.41%
Revenue growth 3Y12.06%
Revenue growth 5Y16.85%
Sales Q2Q%7.91%
Revenue Next Year4.87%
Revenue Next 2Y9.12%
Revenue Next 3Y12.56%
Revenue Next 5YN/A
EBIT growth 1Y76.97%
EBIT growth 3Y6.09%
EBIT growth 5Y24.1%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-550.14%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-415.05%
OCF growth 3YN/A
OCF growth 5YN/A