A bullish thesis on Starwood Property Trust, Inc. was recently presented on The Swedish Dividend Investor's YouTube channel. Starwood Property Trust, Inc.'s share was trading at $17.88 as of January 13th. According to Yahoo Finance, STWD's trailing and forward P/E ratios were 17.57 and 10.06 respectively.
Starwood Property Trust is described as a high-yielding REIT primarily for income-focused investors, where dividends are central to the investment thesis rather than rapid capital appreciation. The company operates as a hybrid REIT across four segments: commercial and residential lending, infrastructure lending, property investments, and real estate investing and servicing. This structure allows it to balance loan-based income with direct property ownership and helps stabilize cash flows compared to pure mortgage REITs.
Since its founding in 2009, the company has deployed over $112 billion in capital and currently manages a diversified $29.9 billion portfolio. More than half of its assets are in commercial loans, with significant exposure to owned properties, infrastructure, and residential lending. The portfolio is geographically diverse, heavily weighted toward multifamily and industrial assets, and structured with floating rate loans designed to perform across interest rate cycles.
Starwood's dividend yield exceeds 10 percent. This yield is supported not only by ongoing distributable earnings but also by $3.82 per share in excess unrealized distributable earnings from property gains, providing an important buffer. Recent quarters have shown distributable earnings slightly below the dividend. The company has paid a stable $0.48 quarterly dividend since 2014 and has never cut its dividend, a rare record within mortgage-focused REITs.
Management expects earnings to improve as interest rates decline and transaction activity increases, supported by strong liquidity. Valuation is best assessed through a dividend-based framework, suggesting fair value around the high teens, broadly in line with the current share price. Long-term reinvestment scenarios demonstrate how high yield with low growth can still generate compelling total returns. Overall, Starwood is positioned as a modest but attractive allocation within a diversified high-yield income portfolio.
Previously, a bullish thesis on Simon Property Group, Inc. was covered by David in April 2025, highlighting the company's disciplined capital structure, dividend growth, and resilience driven by premium tenants and strong free cash flow. The company's stock price has appreciated by approximately 24.53% since that coverage, as income stability and balance sheet strength were rewarded. The Swedish Dividend Investor shares a similar thesis but emphasizes higher yield and income durability through Starwood Property Trust's hybrid REIT structure and excess distributable earnings.
Starwood Property Trust, Inc. is not on the list of the 30 Most Popular Stocks Among Hedge Funds. According to the database, 28 hedge fund portfolios held STWD at the end of the third quarter, up from 25 in the previous quarter. While the potential of STWD as an investment is acknowledged, it is believed that certain AI stocks offer greater upside potential and carry less downside risk.