Rithm Capital Corp. (NYSE: RITM)

Sector: Real Estate Industry: REIT - Mortgage CIK: 0001556593
Market Cap 5.56 Bn
P/B 0.65
P/E 7.15
P/S 1.12
ROIC (Qtr) 6.32
Div Yield % 2.35
Rev 1y % (Qtr) 13.45
Total Debt (Qtr) 34.97 Bn
Debt/Equity (Qtr) 4.12

About

Rithm Capital Corp., known by its ticker symbol RITM, is a company that operates in the real estate, credit, and financial services industry. The company has a diverse range of business activities, which include origination and servicing, investment portfolio, mortgage loans receivable, asset management, and corporate activities. Rithm Capital was established as a limited liability company in September 2011 and has since grown to become a significant player in the mortgage origination and servicing market in the U.S. Rithm Capital's primary business...

Read more

Price action

Investment thesis

Bull case

  • Cash position of 2.16B provides exceptional 125.78x coverage of minority interest expenses 17.18M, indicating strong liquidity.
  • Free cash flow of (2.93B) provides excellent 4.63x coverage of dividends (632.70M), indicating sustainable shareholder returns.
  • Tangible assets of 47.17B provide robust 17.82x coverage of receivables 2.65B, showing strong asset quality.

Bear case

  • Operating cash flow of (2.93B) barely covers its investment activities of 884.73M, with a coverage ratio of -3.31, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of (2.93B) provides minimal -16.92x coverage of tax expenses of 173.23M, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Free cash flow of (2.93B) represents just -1.39x of debt issuance 2.11B, suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of (2.93B) shows concerning coverage of minority interest expenses of 17.18M, which is -170.55x, suggesting complex corporate structure risks.
  • Operating cash flow of (2.93B) is outpaced by equity issuance of 398.58M (-7.35 ratio), indicating concerning reliance on equity markets for funding operations.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the REIT - Mortgage
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 RITM Rithm Capital Corp. 5.56 Bn 7.15 1.12 34.97 Bn
2 STWD Starwood Property Trust, Inc. 5.05 Bn 11.75 4.20 21.43 Bn
3 AGNC AGNC Investment Corp. 4.13 Bn 1.40 1.31 95.01 Bn
4 NLY Annaly Capital Management Inc 3.69 Bn 2.21 1.94 107.02 Bn
5 LADR Ladder Capital Corp 1.29 Bn 20.14 6.00 3.51 Bn
6 MFA Mfa Financial, Inc. 0.89 Bn 3.03 2.45 9.84 Bn
7 CIM Chimera Investment Corp 0.84 Bn 8.08 1.54 12.22 Bn
8 BRSP BrightSpire Capital, Inc. 0.75 Bn -1.47 2.08 2.17 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.78 0.56
EV to Cash from Ops. EV/CFO -12.60 45.88
EV to Debt EV to Debt 1.06 0.87
EV to EBIT EV/EBIT 34.35 187.98
EV to EBITDA EV/EBITDA 13.28 120.37
EV to Free Cash Flow [EV/FCF] EV/FCF -12.60 56.42
EV to Market Cap EV to Market Cap 6.65 25.15
EV to Revenue EV/Rev 7.42 56.50
Price to Book Value [P/B] P/B 0.65 0.71
Price to Earnings [P/E] P/E 7.15 4.95
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.03 -0.57
Dividend Payout Ratio % Div Payout % (Qtr) 67.10 33.95
Dividend per Basic Share Div per Share (Qtr) 1.00 1.18
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -18.49 52.50
Interest Coverage Interest Coverage 0.00 -0.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 0.00 34.54
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 11.07 21.41
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 4.93
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 56.58 14.33
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 13.07 7.56
EBIT Growth (1y) % EBIT 1y % (Qtr) 59.88 17.27
EBT Growth (1y) % EBT 1y % (Qtr) 59.88 7.46
EPS Growth (1y) % EPS 1y % (Qtr) 49.00 41.90
FCF Growth (1y) % FCF 1y % (Qtr) -98.19 60.56
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 15.53 16.78
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.11 0.04
Cash Payout Ratio Cash Payout (Qtr) -0.21 0.90
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 4.12 5.05
Interest Cover Ratio Interest Cover Ratio 0.00 -0.17
Times Interest Earned Times Interest Earned 0.00 -0.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 21.60 136.11
EBIT Margin % EBIT Margin % (Qtr) 21.60 141.14
EBT Margin % EBT Margin % (Qtr) 21.60 128.11
Gross Margin % Gross Margin % (Qtr) 100.00 114.71
Net Profit Margin % Net Margin % (Qtr) 15.60 124.85