This REIT is cheap, sells for ~9.5x run-rate core earnings. Strong fundamentals in the CRE market (demand for loan originations) support an investment in it. The REIT has interest rate upside, investors could see a dividend raise in 2018/9. The dividend has a high degree of dividend safety for a nine percent yielder. An investment in the stock yields 9.2 percent.
One of the best companies to buy for a high-quality income portfolio is Starwood Property Trust, Inc. (STWD), in my opinion. The commercial mortgage REIT benefits from strong demand for loan originations, and the lending business has significant interest rate upside. Starwood Property Trust is moderately valued on a run-rate core earnings basis. I recommend investors to add the REIT on major dips as the dividend has proven to be sustainable. An investment in Starwood Property Trust yields 9.2 percent.
Source: Seeking Alpha
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