德银-美股-房地产行业-按揭REITs：2018年下半年主要考虑因素与Q2预览-20180723-23页_581kb
报告摘要
Real Estate Finance Quarterly Summary - 23 July 2018
Core Content Overview
This report provides an analysis of the performance and outlook for Commercial and Residential Mortgage REITs (mREITs) in the second half of 2018 (2H18) and the second quarter (2Q18) preview. It highlights key trends, valuation metrics, and investment recommendations for various mREITs.
Key Considerations for 2H18 and 2Q Preview
-
Non-Bank CRE Lenders:
- Stocks with market caps of $2+ billion (STWD, BXMT, ARI) have underperformed compared to those with smaller caps (LADR, TRTX, ABR), which are up roughly 22% on average.
- Despite current book value premiums, we expect limited upside in 2H18, but strong total returns due to dividend yields of around 8.5%.
- TRTX is highlighted as having the most room for growth, trading at 1.04x book value and generating an 8.4% dividend yield.
-
Preference for CRE Over Residential:
- CRE mREITs are favored due to their credit-driven portfolios, strong underwriting, and favorable credit outlook.
- Slowing property sales, values, and rental income are headwinds, but macroeconomic and demographic trends support CRE demand.
- Rising short-term rates support ROEs, and undeployed real estate private equity dry powder will drive origination volumes.
-
Agency MBS Managers:
- Book value pressure is a concern due to rising long-term rates, but less pronounced in 2Q.
- Dividend coverage is a key factor for residential mREITs, with NLY and AGNC experiencing book value declines in 1Q.
- TWO is expected to generate ROEs in the 11.5–12% range, sufficient to cover its dividend.
Investment Recommendations
| Company | Ticker | Rating | Price Target |
|---|---|---|---|
| Starwood Property Trust | STWD | Buy | $24.00 |
| Blackstone Mortgage Trust | BXMT | Buy | $33.00 |
| Apollo CRE Finance | ARI | Buy | $19.25 |
| Ladder Capital | LADR | Buy | $16.50 |
| TPG RE Finance Trust | TRTX | Buy | $22.00 |
| Arbor Realty Trust | ABR | Hold | $11.00 |
| Annaly Capital Management | NLY | Hold | $10.00 |
| AGNC Investment Corp. | AGNC | Hold | $18.00 |
| Two Harbors | TWO | Hold | $15.50 |
| Redwood Trust | RWT | Buy | $18.00 |
| Chimera Investment | CIM | Buy | $19.00 |
Valuation and Risks
-
Valuation:
- Based on book value (BV) premiums for credit managers and discounts for RMBS managers.
- Dividend yields and portfolio characteristics are key valuation factors.
-
Risks:
- Downside: Interest rate volatility, real estate value declines, and slowing portfolio growth.
- Upside: Higher-than-expected portfolio growth, net interest income, and leverage.
Key Financial Highlights
-
Dividend Coverage:
- CRE mREITs have strong dividend coverage, with STWD at 117% since 1Q17.
- ARI has the highest dividend yield in the CRE mREIT sector.
- RWT and CIM have strong dividend coverage ratios (142% and 114% respectively for 2018).
-
ROEs and Portfolio Growth:
- CRE mREITs are expected to generate ROEs of 9–12.5% in 2018.
- LADR had a core ROE of 16.3% in 1Q, its highest since 2014.
- BXMT originated its largest single asset in 1Q with a $1.8b financing for NYC office construction.
-
Dividend and Capital Strategy:
- ABR increased its dividend by 19% and is expected to generate a 12.5% ROE in 2018.
- TRTX is expected to grow its dividend to 45c in 2H18.
- TWO is expected to maintain a 20% allocation to the MSR strategy to enhance returns.
Earnings Call Schedule and Total Return Estimates
| Company | Ticker | Expected Earnings Release | Expected Call Date & Time | Dial-in Number | Passcode | BV Premium | Dividend Yield | Price Target | Current Price | Upside To Target | Fwd. 12M Dividend Est. | Dividend Yield Est. | Total Return |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Blackstone Mortgage Trust | BXMT | AMC, 7/24 | 7/25 10AM | 888.268.4178 | 24505461 | 125% | - | $33.00 | $32.64 | 1% | $2.48 | 7.6% | 9% |
| AGNC Investment Corp. | AGNC | AMC, 7/25 | 7/26 830AM | 877.300.5922 | no passcode | 95% | - | $18.00 | $19.11 | -6% | $2.16 | 11.3% | 5% |
| Arbor Realty Trust | ABR | AMC, 7/25 | 7/26 10AM | 877.331.6553 | 1376979 | 130% | - | $11.00 | $11.27 | -2% | $1.00 | 8.9% | 6% |
| Ladder Capital | LADR | AMC, 7/25 | 7/26 10AM | 877.331.6553 | 1376979 | 125% | - | $16.50 | $16.11 | 2% | $1.30 | 8.1% | 10% |
| TPG RE Finance Trust | TRTX | AMC, 7/25 | 7/26 10AM | 877.407.9716 | no passcode | 110% | - | $22.00 | $20.65 | 7% | $1.87 | 9.1% | 12% |
| Starwood Property Trust | STWD | AMC, 7/25 | 7/26 10AM | 877.407.9716 | no passcode | 140% | - | $24.00 | $22.28 | 8% | $1.92 | 8.6% | 16% |
| Chimera Investment | CIM | AMC, 7/25 | 7/26 10AM | 877.407.9716 | no passcode | 110% | - | $19.00 | $18.86 | 1% | $2.00 | 10.6% | 11% |
| Redwood Trust | RWT | AMC, 7/25 | 7/26 10AM | 877.407.9716 | no passcode | 110% | - | $18.00 | $17.19 | 5% | $1.20 | 7.0% | 12% |
Summary of Key Points
- CRE mREITs are expected to outperform residential mREITs in 2H18 due to their floating-rate portfolios, better credit fundamentals, and ability to underwrite construction and transitional loans.
- Dividend coverage remains strong for CRE mREITs, with average yields of 8.5%.
- Book value pressure is a concern for residential mREITs, especially as long-term rates rise, but is expected to be less pronounced in 2Q.
- Investor focus is shifting towards credit-focused CRE names due to the macroeconomic and demographic tailwinds.
- Non-bank CRE lenders are well positioned to benefit from increased demand for flexible, bespoke financing.
- Stock buybacks are a potential tool for RWT to protect against book value declines.
- Earnings call schedules and total return estimates are provided for all listed mREITs, with a focus on dividend yields and book value premiums.
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