According to GuruFocus Dividends page, Redwood Trust Inc (RWT) is the company chose by Gurus with the highest dividend yeld.
The company is held by 17 Gurus, some examples are Wallace Weitz (Trades, Portfolio) that hold 6,322,495 shares or 7.58% of outstanding shares and Jim Simons (Trades, Portfolio), that holds 692,900 shares or 0.83% of outstanding shares.
During the last quarter 7 gurus decided to add the company to their portfolios, while other 10 of them decided to sell it off.
The company is paying shareholders with a yeld of 6.80% and with a payout ratio of 95%. The yeld ratio is not steady, and the growth rate is mixed: 2.60% over the last 5 years and -12.30% over the last 10 years.
The Company is an internally-managed specialty finance company focused on engaging in residential and commercial mortgage banking activities and investing in mortgage- and other real estate-related assets. To generate income through mortgage banking activities it seeks to invest in real estate-related assets that have the potential to generate attractive cash flow returns over time and operates business in three segments: residential mortgage banking ( that is engaged in the business of acquiring residential loans from third-party originators and then selling, financing, or securitizing those loans),residential investments(includes a portfolio of investments in residential mortgage-backed securities retained from Sequoia securitizations), and commercial mortgage banking and investments (that operates as a commercial real estate lender by originating mortgage loans and providing other forms of commercial real estate financing).
RWTÂ has a ROA of 1.90% that is 60% of the 1005 companies in the Global REIT - Diversified industry, a ROE of 8.02 % and a ROC of 7.85%. These ratios are ranked higher than 74% of the 998 companies in the same industry.
Compared to the recent history of RWT, 2005 was the best year for ROE when reached a maximum level of 22.22%. The year 2013 was the best for ROA; it reached the maximum level of 3.83%.
| Â | Current level | Best level of history | Industry Median |
| ROE | 8.02% | 32.82% | 6.95% |
| ROA | 1.9% | 3.83% | 3.16% |
| ROC | 7.85 | 297.73 | 7.85 |
The company has a financial strength of 6 out of 10. Cash to Debt ratio is 0.06, that just 2 years back (in 2013) was at very low level at 0.01. At these levels, it is averaging the sector that has an average level of 0.05. Interest coverage is 1.14 versus an Industry median of 2.69.
| Â | Current level | Best level of history | Industry Median |
| Cash to Debt | 0.06 | 0.06 | 0.05 |
| Interest Coverage | 1.14 | 2.42 | 2.69 |
Over the last five years, the company had an almost null growing rate
| Revenue | -3.00% |
| EBITDA | +1.00% |
| BookValue | +4.20% |
| EPS | +18.80% |
During the last 12 months, EPS dropped by 40.20%, EBITDA dropped by 63.70%, revenue dropped by 47.80% and Free Cash Flow dropped by 417.90%
The stock is trading at $16.50 and over the last year, the price dropped 17%.Currently, the price is down 20.42% from its 52-week high and up 4.70% from its 52-week low.
The stock looks undervalued at current prices based on the Peter Lynch earnings line that gives a fair value of $55.0 with a margin of safety of 70%, while the DCF model gives a fair value of $16.67 and a margin of safety of 1%.
