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Rithm Capital Corp. (RITM - Free Report) announced that its board has approved dividends for both common and preferred stocks for the first quarter of 2024. The first-quarter common stock dividend remains unchanged at 25 cents per share. Last year, the company paid out $483.2 million in common dividends. Shareholders of record as of Apr 1, 2024, will receive the dividend, payable on Apr 26.
For the first quarter, RITM’s Board also declared Series A, Series B, Series C and Series D dividends per share of 46.9 cents, 44.5 cents, 39.8 cents and 43.8 cents, respectively. The dividends will be paid on May 15, 2024, to preferred stockholders of record as of Apr 15.
Starting from 2013, RITM paid dividends of around $5 billion. The company continues to maintain a higher-than-industry dividend yield. Based on the closing price of $11.16 per share on Mar 20, the stock has a dividend yield of almost 9%, which is higher than the industry average of 2.2%.
Now the question arises if that dividend yield is sustainable and how strong its operations are.
Total assets of $35.3 billion as of Dec 31, 2023, rose from $32.5 billion at 2022-end. Total equity of $7.1 billion at year-end was up from $7 billion at 2022-end. It exited the fourth quarter with cash and cash equivalents of $1.29 billion. Its long-term debt to capital of 9.2% is significantly lower than the industry average of 43%.
Net cash from operations was $1.1 billion in 2023. In the past five years, it generated positive net operating cash flow four times and negative cash from operations (cash used in operating activities) once.
Earnings available for distribution in 2023 were $997.2 million, up from $633.1 million in 2022. Improving asset management revenues and continuous acquisition of consumer loans are major tailwinds for the company.
Its focus on boosting capabilities through prudent acquisitions positions it for long-term growth. The acquisition of Sculptor enhances alternative asset management capabilities, facilitating expansion into credit, real estate and multi-strategy investments. It agreed to acquire Computershare Mortgage Services for $720 million, with the transaction expected to be finalized by the first quarter of 2024.
Rithm Capital is shielded from the volatility of the mortgage market due to its diversified business model, offering resilience against underperforming mortgage-backed securities impacted by the high interest rate environment. Moreover, the high interest rate environment is poised to benefit its mortgage servicing business, ensuring sustained cash flows and supporting dividend payouts.
Price Performance
Rithm Capital shares have jumped 39% in the past year, outperforming the industry’s 17.4% growth.
The consensus mark for Axos Financial’s current-year earnings is pegged at $7.22 per share, which indicates 42.4% year-over-year growth. AX beat earnings estimates in each of the past four quarters, with an average surprise of 12.3%. The consensus mark for its current-year revenues is pegged at $1.1 billion, up 22.4% from a year ago.
The consensus mark for Alerus Financial’s 2024 full-year earnings is pegged at $1.53 per share, which remained stable over the past month. ALRS beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 14.4%. The consensus estimate for its 2024 revenues is pegged at $200.5 million, up 4% from a year ago.
The Zacks Consensus Estimate for Burford Capital’s 2024 full-year earnings is pegged at $2.04 per share, which increased by 2 cents in the past week. It beat earnings estimates twice in the past four quarters and missed on the other occasions, with an average surprise of 113.4%. The consensus mark for BUR’s revenues in full-year 2024 is pegged at $882 million.
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Unraveling Rithm Capital's (RITM) Q1 Dividend Announcement
Rithm Capital Corp. (RITM - Free Report) announced that its board has approved dividends for both common and preferred stocks for the first quarter of 2024. The first-quarter common stock dividend remains unchanged at 25 cents per share. Last year, the company paid out $483.2 million in common dividends. Shareholders of record as of Apr 1, 2024, will receive the dividend, payable on Apr 26.
For the first quarter, RITM’s Board also declared Series A, Series B, Series C and Series D dividends per share of 46.9 cents, 44.5 cents, 39.8 cents and 43.8 cents, respectively. The dividends will be paid on May 15, 2024, to preferred stockholders of record as of Apr 15.
Starting from 2013, RITM paid dividends of around $5 billion. The company continues to maintain a higher-than-industry dividend yield. Based on the closing price of $11.16 per share on Mar 20, the stock has a dividend yield of almost 9%, which is higher than the industry average of 2.2%.
Now the question arises if that dividend yield is sustainable and how strong its operations are.
Total assets of $35.3 billion as of Dec 31, 2023, rose from $32.5 billion at 2022-end. Total equity of $7.1 billion at year-end was up from $7 billion at 2022-end. It exited the fourth quarter with cash and cash equivalents of $1.29 billion. Its long-term debt to capital of 9.2% is significantly lower than the industry average of 43%.
Net cash from operations was $1.1 billion in 2023. In the past five years, it generated positive net operating cash flow four times and negative cash from operations (cash used in operating activities) once.
Earnings available for distribution in 2023 were $997.2 million, up from $633.1 million in 2022. Improving asset management revenues and continuous acquisition of consumer loans are major tailwinds for the company.
Its focus on boosting capabilities through prudent acquisitions positions it for long-term growth. The acquisition of Sculptor enhances alternative asset management capabilities, facilitating expansion into credit, real estate and multi-strategy investments. It agreed to acquire Computershare Mortgage Services for $720 million, with the transaction expected to be finalized by the first quarter of 2024.
Rithm Capital is shielded from the volatility of the mortgage market due to its diversified business model, offering resilience against underperforming mortgage-backed securities impacted by the high interest rate environment. Moreover, the high interest rate environment is poised to benefit its mortgage servicing business, ensuring sustained cash flows and supporting dividend payouts.
Price Performance
Rithm Capital shares have jumped 39% in the past year, outperforming the industry’s 17.4% growth.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Rithm Capital currently sports a Zacks Rank #1 (Strong Buy). Some other top-ranked stocks in the broader Finance space are Axos Financial, Inc. (AX - Free Report) , Alerus Financial Corporation (ALRS - Free Report) and Burford Capital Limited (BUR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for Axos Financial’s current-year earnings is pegged at $7.22 per share, which indicates 42.4% year-over-year growth. AX beat earnings estimates in each of the past four quarters, with an average surprise of 12.3%. The consensus mark for its current-year revenues is pegged at $1.1 billion, up 22.4% from a year ago.
The consensus mark for Alerus Financial’s 2024 full-year earnings is pegged at $1.53 per share, which remained stable over the past month. ALRS beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 14.4%. The consensus estimate for its 2024 revenues is pegged at $200.5 million, up 4% from a year ago.
The Zacks Consensus Estimate for Burford Capital’s 2024 full-year earnings is pegged at $2.04 per share, which increased by 2 cents in the past week. It beat earnings estimates twice in the past four quarters and missed on the other occasions, with an average surprise of 113.4%. The consensus mark for BUR’s revenues in full-year 2024 is pegged at $882 million.