We assign a fundamental rating of 4 out of 10 to RWT. RWT was compared to 68 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. RWT may be in some trouble as it scores bad on both profitability and health. RWT is not overvalued while it is showing excellent growth. This is an interesting combination.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

RWT had positive earnings in the past year.
In the past year RWT has reported a negative cash flow from operations.
The reported net income has been mixed in the past 5 years: RWT reported negative net income in multiple years.
In the past 5 years RWT always reported negative operating cash flow.

1.2 Ratios

Looking at the Return On Assets, with a value of -0.48%, RWT is doing worse than 72.06% of the companies in the same industry.
With a Return On Equity value of -10.92%, RWT is not doing good in the industry: 75.00% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
ROA	-0.48%
ROE	-10.92%
ROIC	N/A

ROA(3y)-0.38%

ROA(5y)-0.94%

ROE(3y)-4.33%

ROE(5y)-8.65%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

RWT's Profit Margin has declined in the last couple of years.
RWT's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 6.58%, RWT is doing worse than 86.76% of the companies in the same industry.
In the last couple of years the Gross Margin of RWT has declined.
RWT does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.

		Industry Rank	Sector Rank
OM	N/A
PM (TTM)	N/A
GM	6.58%

OM growth 3Y-58.99%

OM growth 5Y-33.77%

PM growth 3Y-56.86%

PM growth 5Y-30.4%

GM growth 3Y-21.34%

GM growth 5Y-11.34%

More info and screens

ROA

ROE

ROIC

Operating and Profit Margin

Show most profitable peers

2. Health

2.1 Basic Checks

RWT does not have a ROIC to compare to the WACC, probably because it is not profitable.
The number of shares outstanding for RWT has been increased compared to 1 year ago.
The number of shares outstanding for RWT has been increased compared to 5 years ago.
The debt/assets ratio for RWT is higher compared to a year ago.

2.2 Solvency

RWT has an Altman-Z score of 0.01. This is a bad value and indicates that RWT is not financially healthy and even has some risk of bankruptcy.
RWT has a better Altman-Z score (0.01) than 60.29% of its industry peers.
RWT has a Debt/Equity ratio of 21.20. This is a high value indicating a heavy dependency on external financing.
RWT has a worse Debt to Equity ratio (21.20) than 95.59% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	21.2
Debt/FCF	N/A
Altman-Z	0.01

ROIC/WACCN/A

WACC4.6%

2.3 Liquidity

RWT has a Current Ratio of 0.17. This is a bad value and indicates that RWT is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.17, RWT is in line with its industry, outperforming 51.47% of the companies in the same industry.
A Quick Ratio of 0.17 indicates that RWT may have some problems paying its short term obligations.
RWT's Quick ratio of 0.17 is in line compared to the rest of the industry. RWT outperforms 51.47% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.17
Quick Ratio	0.17

More info and screens

WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

Show peers with great health

3. Growth

3.1 Past

RWT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 47.73%, which is quite impressive.
Measured over the past years, RWT shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -19.83% on average per year.
Looking at the last year, RWT shows a very strong growth in Revenue. The Revenue has grown by 21.58%.
Measured over the past years, RWT shows a quite strong growth in Revenue. The Revenue has been growing by 9.67% on average per year.

EPS 1Y (TTM)47.73%

EPS 3Y-39.69%

EPS 5Y-19.83%

EPS Q2Q%11.11%

Revenue 1Y (TTM)21.58%

Revenue growth 3Y19.75%

Revenue growth 5Y9.67%

Sales Q2Q%-41.18%

3.2 Future

The Earnings Per Share is expected to grow by 21.24% on average over the next years. This is a very strong growth
RWT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.80% yearly.

EPS Next Y48.39%

EPS Next 2Y30.52%

EPS Next 3Y21.24%

EPS Next 5YN/A

Revenue Next Year-11.34%

Revenue Next 2Y13.85%

Revenue Next 3Y12.8%

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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

More info and screens

Find the best growth stocks

Show best growing peers

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 8.95, which indicates a very decent valuation of RWT.
Based on the Price/Earnings ratio, RWT is valued a bit cheaper than the industry average as 73.53% of the companies are valued more expensively.
RWT is valuated cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 6.57 indicates a rather cheap valuation of RWT.
Based on the Price/Forward Earnings ratio, RWT is valued cheaper than 89.71% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of RWT to the average of the S&P500 Index (25.98), we can say RWT is valued rather cheaply.

		Industry Rank	Sector Rank
PE	8.95
Fwd PE	6.57

4.2 Price Multiples

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	N/A

4.3 Compensation for Growth

RWT's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as RWT's earnings are expected to grow with 21.24% in the coming years.

PEG (NY)0.19

PEG (5Y)N/A

EPS Next 2Y30.52%

EPS Next 3Y21.24%

More info and screens

Show best valued peers

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 12.79%, RWT is a good candidate for dividend investing.
RWT's Dividend Yield is a higher than the industry average which is at 11.26.
RWT's Dividend Yield is rather good when compared to the S&P500 average which is at 1.81.

		Industry Rank	Sector Rank
Dividend Yield	12.79%

5.2 History

The dividend of RWT decreases each year by -10.27%.
RWT has been paying a dividend for at least 10 years, so it has a reliable track record.

Dividend Growth(5Y)-10.27%

Div Incr Years0

Div Non Decr Years0

5.3 Sustainability

RWT has negative earnings and hence a negative payout ratio. The dividend may be in danger.

DP-98.1%

EPS Next 2Y30.52%

EPS Next 3Y21.24%

More info and screens

Find the best dividend stocks

Show peers with best dividend

REDWOOD TRUST INC / RWT FAQ

What is the ChartMill fundamental rating of REDWOOD TRUST INC (RWT) stock?

ChartMill assigns a fundamental rating of 4 / 10 to RWT.

Can you provide the valuation status for REDWOOD TRUST INC?

ChartMill assigns a valuation rating of 6 / 10 to REDWOOD TRUST INC (RWT). This can be considered as Fairly Valued.

What is the profitability of RWT stock?

REDWOOD TRUST INC (RWT) has a profitability rating of 1 / 10.

What is the financial health of REDWOOD TRUST INC (RWT) stock?

The financial health rating of REDWOOD TRUST INC (RWT) is 1 / 10.

What is the earnings growth outlook for REDWOOD TRUST INC?

The Earnings per Share (EPS) of REDWOOD TRUST INC (RWT) is expected to grow by 48.39% in the next year.