Rithm Capital: Most Buy For The 10% Dividend, But The Upside Is The Thesis
Summarize this article with:
Luca Socci7.02K FollowersFollow5ShareSavePlay(11min)Comments(4)SummaryRithm Capital (RITM) is transitioning from a mortgage REIT to a diversified financial services and asset management platform, with four distinct operating segments.RITM's EAD yield stands at 23.65% and its conservative 42.56% payout ratio underpins a secure 10%+ dividend yield, offering significant upside potential.The asset management segment, bolstered by Crestline and Sculptor acquisitions, is a key catalyst for multiple expansion and could drive the stock toward a $14 target.I view RITM as a compelling buy, with catalysts including C-Corp conversion, asset management growth, and a current valuation at just 0.78x book value. 10255185_880/iStock via Getty Images Rithm Capital: Coverage Initiation This is the first time I have written about Rithm Capital. Three things led me to initiate my coverage: the struggles of the private credit sector (I have been dealing with it for some months), a business model transformation thatThis article was written byLuca Socci7.02K FollowersFollowI’m a long-term investor focused on U.S. and European equities, with a dual emphasis on undervalued growth stocks and high-quality dividend growers. Through years of experience, I’ve learned that sustained profitability—evident in strong margins, stable and expanding free cash flow, and high returns on invested capital—is a more reliable driver of returns than valuation alone. I manage one of my portfolios publicly on eToro, where I qualified as a Popular Investor, allowing others to copy my real-time investment decisions. My background spans Economics, Classical Philology, Philosophy and Theology. This interdisciplinary foundation sharpens both my quantitative analysis and my ability to interpret market narratives through a broader, long-term lens. I started investing when I became a father. By managing wisely what I received and earn, I aim to ensure for me and my children that we don't have so much that we don't have to do anything, but that we have enough assets to be free to do what we want. The goal is not to free myself from work, but to make sure I can work in the place and in a way where I can fully express myself.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in RITM over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.