Rithm Capital Corp. (14N1)
Summary
14N1 Chart
9.8% Yield Worthy Of A Buy From Rithm Capital
Rithm Capital Corp. (RITM) preferred share RITM-B is in our buy range, offering a compelling risk-reward profile for income-focused investors. RITM-B trades below call value with a stripped yield of 9.78%, and an annualized yield-to-call of 18%, making it attractive relative to sector peers. RITM-B is suitable for low-risk and buy-and-hold investors seeking higher yield, though it carries slightly more risk than Annaly Capital Management's preferreds.
Rithm Capital: Buy The 11% Yield That The Rate Cycle Cannot Easily Break
Rithm Capital is a diversified origination, servicing, and asset management company, not a traditional agency-focused mortgage REIT. RITM's income is driven by fee and servicing businesses, with a large MSR portfolio naturally hedging book value against rising rates. The Buy rating is based on a reliable ~11% yield, covered roughly twice by distributable earnings, with discount closure optionality but no near-term catalyst.
7% Dividend Yield That Resets Soon By Rithm Capital
Rithm Capital Corp. preferred D shares offer an attractive risk-reward profile near current prices, with a 7.08% stripped yield. RITM-D provides a compelling 9.1% annualized yield-to-call if redeemed soon after call protection ends on 11/15/2026. If not called, RITM.PR.D resets to a strong floating yield (10.56% at current rates), likely trading above par barring a recession.
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Rithm Capital Corp. Profile
| Mortgage Real Estate Investment Trusts (REITs) Industry | Financials Sector | Michael Nierenberg CEO | XFRA Exchange | US64828T2015 ISIN |
| US Country | 6,045 Employees | 6 Apr 2026 Last Dividend | 20 Oct 2014 Last Split | 2 May 2013 IPO Date |
Overview
Rithm Capital Corp., previously known as New Residential Investment Corp., is a significant player in the asset management field, focusing primarily on real estate, credit, and financial services. The company operates through various segments, including Origination and Servicing, Investment Portfolio, Mortgage Loans Receivable, and Asset Management, catering to a wide range of financial and real estate investments. Rithm Capital Corp. is structured as a real estate investment trust (REIT), offering tax advantages by distributing a majority of its taxable income to shareholders. Founded in 2011 and headquartered in New York, New York, the company has established a strong reputation in the financial world for its diversified investment portfolio and strategic asset management.
Products and Services
- Mortgage Servicing Rights (MSR) and MSR Financing Receivables: These rights give Rithm Capital Corp. the authority to service mortgage loans in exchange for a fee. The company also engages in financing these receivables, providing liquidity and stability to the mortgage market.
- Title, Appraisal, and Property Preservation Services: Offerings include a comprehensive range of services aimed at maintaining and verifying the value and condition of real estate assets, essential for both lending and investment purposes.
- Excess MSRs: Investing in excess MSRs allows the company to earn a portion of the servicing fee without the responsibilities of primary mortgage servicing, capturing value from servicing spreads.
- Services Advance Investments: These investments involve funding the upfront costs associated with defaulted loans, such as taxes and insurance, anticipating reimbursement through foreclosure or loan modification processes.
- Real Estate Securities and Call Rights: Rithm invests in various real estate securities, including mortgage-backed securities, adding diversification and yield to its portfolio. The company also utilizes call rights to potentially buy back mortgage loans pre-sold into securitization trusts at advantageous prices.
- SFR Properties: The investment in Single-Family Rental (SFR) properties allows Rithm Capital Corp. to capitalize on the growing demand for rental housing, generating steady income streams through property rentals.
- Residential Mortgage Loans: The company directly invests in residential mortgage loans, benefiting from the interest income generated from borrowers' payments.
- Consumer and Business Purpose Loans: Beyond the real estate sector, Rithm extends its credit operations to consumer and business loans, broadening its asset base and income sources.
- Asset Management Related Investments: These investments showcase Rithm's strategic expansion into overseeing and managing a diverse range of assets, further solidifying its presence in the asset management industry.
