WallStSmart

Redwood Trust Inc (RWT)vsStarwood Property Trust Inc (STWD)

VS

Smart Verdict

WallStSmart Research — data-driven comparison

Starwood Property Trust Inc generates 128% more annual revenue ($597.28M vs $261.57M). STWD leads profitability with a 38.2% profit margin vs 2.2%. RWT appears more attractively valued with a PEG of 1.47. STWD earns a higher WallStSmart Score of 49/100 (D+).

RWT

Hold

43

out of 100

Grade: D

Growth: 4.7Profit: 4.0Value: 7.0Quality: 2.5
Piotroski: 2/9Altman Z: 0.00

STWD

Hold

49

out of 100

Grade: D+

Growth: 4.7Profit: 5.0Value: 6.7Quality: 2.5
Piotroski: 2/9Altman Z: 0.03
IV

Intrinsic Value Comparison

Multi-model valuation · Graham Formula

RWTUndervalued (+58.7%)

Margin of Safety

+58.7%

Fair Value

$16.21

Current Price

$3.55

$12.66 discount

UndervaluedFair: $16.21Overvalued
STWDUndervalued (+84.8%)

Margin of Safety

+84.8%

Fair Value

$118.70

Current Price

$15.62

$103.08 discount

UndervaluedFair: $118.70Overvalued

Key Strengths & Concerns

Side-by-side fundamental analysis

Key Strengths

RWT1 strengths · Avg: 10.0/10
Price/BookValuation
0.5x10/10

Reasonable price relative to book value

STWD2 strengths · Avg: 10.0/10
Price/BookValuation
0.9x10/10

Reasonable price relative to book value

Profit MarginProfitability
38.2%10/10

Keeps 38 of every $100 in revenue as profit

Areas to Watch

RWT4 concerns · Avg: 3.0/10
Market CapQuality
$566.51M3/10

Smaller company, higher risk/reward

Return on EquityProfitability
0.6%3/10

ROE of 0.6% — below average capital efficiency

Profit MarginProfitability
2.2%3/10

2.2% margin — thin

Operating MarginProfitability
0.1%3/10

Operating margin of 0.1%

STWD4 concerns · Avg: 3.5/10
PEG RatioValuation
1.744/10

Expensive relative to growth rate

P/E RatioValuation
26.9x4/10

Moderate valuation

Return on EquityProfitability
5.3%3/10

ROE of 5.3% — below average capital efficiency

Piotroski F-ScoreQuality
2/93/10

Weak financial health signals

Comparative Analysis Report

WallStSmart Research

Bull Case : RWT

The strongest argument for RWT centers on Price/Book. PEG of 1.47 suggests the stock is reasonably priced for its growth.

Bull Case : STWD

The strongest argument for STWD centers on Price/Book, Profit Margin. Profitability is solid with margins at 38.2% and operating margin at -5.9%. Revenue growth of 13.4% demonstrates continued momentum.

Bear Case : RWT

The primary concerns for RWT are Market Cap, Return on Equity, Profit Margin. Debt-to-equity of 29.41 is elevated, increasing financial risk. Thin 2.2% margins leave little buffer for downturns.

Bear Case : STWD

The primary concerns for STWD are PEG Ratio, P/E Ratio, Return on Equity. Debt-to-equity of 3.65 is elevated, increasing financial risk.

Key Dynamics to Monitor

RWT profiles as a value stock while STWD is a mature play — different risk/reward profiles.

RWT carries more volatility with a beta of 1.43 — expect wider price swings.

STWD is growing revenue faster at 13.4% — sustainability is the question.

STWD generates stronger free cash flow (-141M), providing more financial flexibility.

Bottom Line

STWD scores higher overall (49/100 vs 43/100), backed by strong 38.2% margins and 13.4% revenue growth. RWT offers better value entry with a 58.7% margin of safety. Both earn "Hold" and "Hold" ratings respectively — the choice depends on your investment horizon and risk tolerance.

This analysis is generated from publicly available financial data. Not financial advice.

Redwood Trust Inc

REAL ESTATE · REIT - MORTGAGE · USA

Redwood Trust, Inc., is a specialized finance company in the United States. The company is headquartered in Mill Valley, California.

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Starwood Property Trust Inc

REAL ESTATE · REIT - MORTGAGE · USA

Starwood Property Trust, Inc. is a real estate investment trust (REIT) in the United States and Europe. The company is headquartered in Greenwich, Connecticut.

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