STWD Stock Dips as Q2 Earnings Match Estimates, Revenues Rise Y/Y

Shares of Starwood Property Trust, Inc. STWD fell 1.73% during yesterday’s trading session after reporting second-quarter 2026 results. The company reported second-quarter 2026  distributable earnings of 40 cents per share, which matched the Zacks Consensus Estimate. The reported figure declined from 43 cents per share in the year-ago quarter.

The quarterly performance was mainly affected by higher operating expenses and increased credit loss provisions. Nonetheless, higher revenues, strong investment activity, and continued portfolio expansion provided some support to results.

The company’s second-quarter 2026 net income (on a GAAP basis) was $6.6 million, down 95% year over year.

Inside Starwood Property’s Headlines

STWD’s total revenues were $513.7 million, up 15.6% year over year. Also, the top line surpassed the Zacks Consensus Estimate by 1.6%. The year-over-year increase was primarily driven by higher interest income from loans, rental income, and servicing-related revenues.

Total costs and expenses were $524.8 million, up 22% from the prior-year quarter. Higher interest expense, general and administrative costs, rental operating costs, depreciation and amortization, and net credit loss provision primarily drove the increase.

Starwood Property’s BVPS (GAAP basis) was $17.53 as of June 30, 2026, down 7.2% from $18.8 in the prior-year quarter.

During the quarter, the company invested $2.5 billion, bringing total investments to $5.0 billion in the first six months of 2026 and $6.7 billion through July, reflecting continued deployment across its lending and real estate businesses.

Further, Starwood Property ended the quarter with total assets of $31.8 billion, up 15.6%, and commercial lending assets of $17.3 billion, reflecting continued growth across its diversified platform.

Starwood Property’s Balance Sheet Position

As of June 30, 2026, cash and cash equivalents were $367.6 million, up from $259.9 million as of June 30, 2025.

Loans held for sale totaled $2.22 billion, compared with $2.49 billion a year earlier. Meanwhile, loans held for investment increased to $19.82 billion from $17.83 billion, reflecting continued growth in the lending portfolio.

Starwood Property's Funding Position

During the quarter, Starwood Property completed $2.1 billion of corporate debt transactions, extending its weighted-average corporate debt maturity to 3.7 years. The transactions also lowered the company's cost of funds, further strengthening its balance sheet and enhancing its financial flexibility.

Starwood Property’s Capital Returns

During the first six months of 2026, Starwood Property repurchased $30 million of its common shares. Additionally, the company maintained its quarterly dividend at 48 cents per share, underscoring its continued commitment to returning capital to shareholders.

Our Take on STWD

Starwood Property continues to benefit from its diversified commercial real estate lending platform, disciplined capital deployment, and strong origination pipeline. Record assets, robust investment activity, and an improving commercial real estate backdrop are expected to support long-term growth. However, higher funding costs, elevated credit provisions, and the sharp decline in earnings remain concerns and could continue to weigh on near-term profitability despite healthy revenue growth.

STARWOOD PROPERTY TRUST, INC. Price, Consensus and EPS Surprise

STARWOOD PROPERTY TRUST, INC. price-consensus-eps-surprise-chart | STARWOOD PROPERTY TRUST, INC. Quote

STWD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

AGNC Investment Corp. AGNC reported second-quarter 2026 net spread and dollar roll income per common share of 40 cents, topping the Zacks Consensus Estimate by 5.3%. The metric increased 5.3% from the year-ago quarter’s 38 cents.

AGNC’s results benefited from higher net interest income, an increase in tangible book value per share, and growth in the investment portfolio. However, a lower net interest spread, a rise in the weighted average cost of funds, and elevated prepayment rates were concerning.

Annaly Capital Management, Inc. NLY reported second-quarter 2026 earnings available for distribution per average share of 79 cents, which beat the Zacks Consensus Estimate of 75 cents. The figure increased from 73 cents in the year-ago quarter.

NLY’s net interest income and net interest margin improved year over year in the reported quarter. Notably, the year-over-year increase in book value per share was also encouraging. However, higher economic funding costs were concerning.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research