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

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.

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.

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