RITHM CAPITAL CORP (RITM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RITM - US64828T2015 - REIT
11.92 USD
+0.02 (+0.17%)
11.75 USD
-0.17 (-1.43%)
Overall RITM gets a fundamental rating of 5 out of 10. We evaluated RITM against 68 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. While RITM has a great profitability rating, there are quite some concerns on its financial health. RITM is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
- In the past year RITM was profitable.
- RITM had a negative operating cash flow in the past year.
- Of the past 5 years RITM 4 years were profitable.
- RITM had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
- RITM's Return On Assets of 1.65% is amongst the best of the industry. RITM outperforms 92.65% of its industry peers.
- RITM's Return On Equity of 9.15% is amongst the best of the industry. RITM outperforms 95.59% of its industry peers.
- RITM has a Return On Invested Capital of 2.20%. This is amongst the best in the industry. RITM outperforms 89.71% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for RITM is above the industry average of 1.28%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.65% | ||
| ROE | 9.15% | ||
| ROIC | 2.2% |
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
- With a decent Profit Margin value of 15.21%, RITM is doing good in the industry, outperforming 69.12% of the companies in the same industry.
- RITM's Profit Margin has declined in the last couple of years.
- The Operating Margin of RITM (23.92%) is better than 86.76% of its industry peers.
- In the last couple of years the Operating Margin of RITM has grown nicely.
- RITM has a better Gross Margin (66.94%) than 89.71% of its industry peers.
- In the last couple of years the Gross Margin of RITM has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.92% | ||
| PM (TTM) | 15.21% | ||
| GM | 66.94% |
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
- RITM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- RITM has more shares outstanding than it did 1 year ago.
- Compared to 5 years ago, RITM has more shares outstanding
- Compared to 1 year ago, RITM has a worse debt to assets ratio.
2.2 Solvency
- Based on the Altman-Z score of 0.10, we must say that RITM is in the distress zone and has some risk of bankruptcy.
- RITM has a better Altman-Z score (0.10) than 76.47% of its industry peers.
- A Debt/Equity ratio of 3.80 is on the high side and indicates that RITM has dependencies on debt financing.
- RITM's Debt to Equity ratio of 3.80 is fine compared to the rest of the industry. RITM outperforms 60.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.8 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.1 |
ROIC/WACC0.36
WACC6.13%
2.3 Liquidity
- RITM has a Current Ratio of 0.22. This is a bad value and indicates that RITM is not financially healthy enough and could expect problems in meeting its short term obligations.
- RITM has a Current ratio (0.22) which is comparable to the rest of the industry.
- RITM has a Quick Ratio of 0.22. This is a bad value and indicates that RITM is not financially healthy enough and could expect problems in meeting its short term obligations.
- RITM's Quick ratio of 0.22 is in line compared to the rest of the industry. RITM outperforms 58.82% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.22 | ||
| Quick Ratio | 0.22 |
3. Growth
3.1 Past
- RITM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.00%, which is quite good.
- Measured over the past years, RITM shows a decrease in Earnings Per Share. The EPS has been decreasing by -0.75% on average per year.
- RITM shows a strong growth in Revenue. In the last year, the Revenue has grown by 39.30%.
- The Revenue has been growing by 16.85% on average over the past years. This is quite good.
EPS 1Y (TTM)10%
EPS 3Y11.94%
EPS 5Y-0.75%
EPS Q2Q%0%
Revenue 1Y (TTM)39.3%
Revenue growth 3Y12.06%
Revenue growth 5Y16.85%
Sales Q2Q%-17.6%
3.2 Future
- The Earnings Per Share is expected to grow by 5.41% on average over the next years.
- RITM is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 37.69% yearly.
EPS Next Y6.15%
EPS Next 2Y5.83%
EPS Next 3Y4.82%
EPS Next 5Y5.41%
Revenue Next Year-3.91%
Revenue Next 2Y1.74%
Revenue Next 3Y2.72%
Revenue Next 5Y37.69%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 5.42, the valuation of RITM can be described as very cheap.
- Based on the Price/Earnings ratio, RITM is valued cheaper than 97.06% of the companies in the same industry.
- When comparing the Price/Earnings ratio of RITM to the average of the S&P500 Index (28.39), we can say RITM is valued rather cheaply.
- The Price/Forward Earnings ratio is 5.09, which indicates a rather cheap valuation of RITM.
- RITM's Price/Forward Earnings ratio is rather cheap when compared to the industry. RITM is cheaper than 95.59% of the companies in the same industry.
- RITM's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.72.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.42 | ||
| Fwd PE | 5.09 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
- RITM's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- RITM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)0.88
PEG (5Y)N/A
EPS Next 2Y5.83%
EPS Next 3Y4.82%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 9.58%, RITM is a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 11.60, RITM is paying slightly less dividend.
- RITM's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.58% |
5.2 History
- The dividend of RITM decreases each year by -10.86%.
- RITM has paid a dividend for at least 10 years, which is 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 Years4
5.3 Sustainability
- 81.40% of the earnings are spent on dividend by RITM. This is not a sustainable payout ratio.
DP81.4%
EPS Next 2Y5.83%
EPS Next 3Y4.82%
RITHM CAPITAL CORP / RITM FAQ
What is the ChartMill fundamental rating of RITHM CAPITAL CORP (RITM) stock?
ChartMill assigns a fundamental rating of 5 / 10 to RITM.
What is the valuation status for RITM stock?
ChartMill assigns a valuation rating of 6 / 10 to RITHM CAPITAL CORP (RITM). This can be considered as Fairly Valued.
What is the profitability of RITM stock?
RITHM CAPITAL CORP (RITM) has a profitability rating of 7 / 10.
Can you provide the expected EPS growth for RITM stock?
The Earnings per Share (EPS) of RITHM CAPITAL CORP (RITM) is expected to grow by 6.15% in the next year.
How sustainable is the dividend of RITHM CAPITAL CORP (RITM) stock?
The dividend rating of RITHM CAPITAL CORP (RITM) is 5 / 10 and the dividend payout ratio is 81.4%.