Core Viewpoint - The focus is on creating a portfolio that emphasizes growth and dividend income, aiming for an easy retirement through compounding dividend income and growth [1]. Group 1: Investment Strategy - The investment strategy is structured to generate monthly dividend income that grows through reinvestment and annual increases [1]. Group 2: Personal Position - The individual has a beneficial long position in the shares of RITM, indicating confidence in the stock's performance [1].

Core Insights - The article discusses Rithm Capital Corp.'s Series A 7.50% Preferred Stock (RITM.PR.A) and its previous 'Buy' rating, highlighting a partial redemption of the series [1] Company Overview - Rithm Capital Corp. has been actively involved in capital markets, with a focus on providing transparency and analytics through Binary Tree Analytics (BTA) [1] - BTA specializes in Closed-End Funds (CEFs), Exchange-Traded Funds (ETFs), and Special Situations, aiming for high annualized returns with low volatility [1] Investment Background - The investment team has over 20 years of experience in the finance sector, with a strong educational background in finance from a top university [1]

Group 1 - Rithm (RITM) shares have increased by 1.6% over the past four weeks, closing at $11.07, with a mean price target of $14.14 indicating a potential upside of 27.7% [1] - The mean estimate consists of seven short-term price targets with a standard deviation of $1.11, where the lowest estimate is $12.50 (12.9% increase) and the highest is $16.00 (44.5% increase) [2] - Analysts show strong agreement on RITM's ability to report better earnings, with a positive trend in earnings estimate revisions suggesting potential upside [4][11] Group 2 - The Zacks Consensus Estimate for RITM's current year has increased by 1.2% over the last 30 days, with one estimate moving higher and no negative revisions [12] - RITM holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While the consensus price target may not be a reliable indicator of RITM's potential gains, it does provide a directional guide for price movement [14]

Group 1 - The equity market serves as a significant mechanism for wealth creation or destruction over the long term through daily price fluctuations [1] - Pacifica Yield focuses on long-term wealth creation by targeting undervalued high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

Financial Performance - As of September 30, 2025, Rithm Capital had approximately $47.2 billion in total assets and $37.5 billion in assets under management (AUM) [422] - The book value per common share increased to $12.83 as of September 30, 2025, up from $12.71 as of June 30, 2025, reflecting a net income attributable to common stockholders of $36.5 million for the three months ended March 31, 2025 [423] - The company reported a net income of $228.798 million for the three months ended September 30, 2025, down from $318.006 million in the previous quarter [536] - Net income attributable to common stockholders for the three months ended September 30, 2025 was $193.662 million, a decrease of $90.237 million compared to the previous quarter [536] - Interest income for the nine months ended September 30, 2025 decreased by $90.7 million, primarily due to a reduced securities portfolio and elevated default rates related to certain consumer loans [540] - For the nine months ended September 30, 2025, servicing revenue, net increased by $0.5 million, driven by a $55.9 billion increase in servicing UPB compared to the same period in 2024 [538] Market Conditions - The unemployment rate increased to 4.3% in August 2025 from 4.1% in June 2025, indicating a slight loosening in the labor market [428] - The nominal 10-year Treasury yield declined slightly to 4.15% at the end of September 2025 from 4.23% at the end of June 2025 [427] - Core personal consumption expenditure inflation was 2.9% in August 2025, with the overall Consumer Price Index (CPI) rising to 3.0% in September 2025 from 2.7% in June 2025 [426] - Elevated interest rates during the reporting period may have impacted borrowers' willingness to enter into mortgage transactions [533] - The Federal Open Market Committee cut interest rates by a quarter percentage point in September 2025, with projections for two more rate cuts in the year [425] Loan Origination and Servicing - The origination business funded $16.4 billion of mortgages for the three months ended September 30, 2025, and $44.5 billion for the nine months ended September 30, 2025, compared to $41.3 billion for the same period in 2024 [436] - Funded loan origination volume for the three months ended September 30, 2025, was $16.4 billion, up from $16.3 billion for the previous quarter [445] - Purchase originations comprised 74.8% of funded loans for the three months ended September 30, 2025, an increase from 72.8% in the previous quarter [443] - Refinance originations comprised 26.4% of funded loans for the nine months ended September 30, 2025, higher than 16.4% for the same period in 2024 [444] - The total servicing portfolio reached $877.5 billion UPB as of September 30, 2025, an increase of $13.3 billion from June 30, 2025, primarily due to new client acquisition and loan production [437] Debt and Liquidity - The company reported total debt of $27.50 billion as of September 30, 2025, down from $28.28 billion at the end of 2024 [434] - Total outstanding debt obligations amounted to $32.5 billion as of September 30, 2025 [567] - The company has margin exposure on $16.5 billion of secured financing agreements, which could significantly impact liquidity if collateral value declines [568] - As of September 30, 2025, approximately $1.3 billion of available liquidity was held at NRM and Newrez, with $0.7 billion in excess of regulatory liquidity requirements [563] - The company expects to meet its long-term liquidity requirements through cash on hand and additional borrowings if needed [587] Strategic Initiatives - Rithm Capital is exploring growth opportunities in direct lending, insurance, private equity, and infrastructure spaces [421] - A strategic investment partnership was announced to fund the acquisition of up to $500 million of residential transition loans, with potential total acquisitions of up to $1.5 billion [520] - The company entered into a Purchase and Sale Agreement to acquire Crestline for $300 million, expected to close in Q4 2025 [569] - The acquisition of Paramount is valued at approximately $1.6 billion and is also expected to close in Q4 2025 [571] Asset Management - The company’s asset management platform had approximately $37.5 billion in assets under management (AUM) as of September 30, 2025 [519] - Asset management revenues for the nine months ended September 30, 2025, were $267.6 million, primarily driven by management fees and incentive income [527] - The company has unfunded capital commitments of $303.5 million to certain funds managed by Sculptor as of September 30, 2025 [611] Other Financial Metrics - Total gain on originated residential mortgage loans, held-for-sale, net increased by $3.3 million to $176.0 million for the three months ended September 30, 2025, compared to the previous quarter [443] - Total servicing fees for the three months ended September 30, 2025, were $515,409,000, a QoQ increase of $6,080,000 and a YoY increase of $235,009,000 [449] - The company reported a pull-through adjusted lock volume of $17.68 billion for the three months ended September 30, 2025, compared to $16.66 billion in the previous quarter [445] - The total outstanding face amount of Non-Agency securities was $8.6 billion, with an amortized cost basis of $669.1 million as of September 30, 2025 [480]

Core Insights - Rithm (RITM) reported a revenue of $1.11 billion for Q3 2025, marking a year-over-year increase of 78.5% and exceeding the Zacks Consensus Estimate by 10.53% [1] - The company's EPS for the same quarter was $0.54, unchanged from the previous year, indicating no EPS surprise [1] Revenue Breakdown - Interest income was reported at $453.79 million, which is a decline of 17.6% year-over-year and below the average estimate of $485.25 million [4] - Servicing revenue, net, was $314.93 million, reflecting a significant year-over-year decrease of 223.9% and falling short of the average estimate of $413.89 million [4] - Other revenues amounted to $55.63 million, slightly above the average estimate of $30.99 million, with a year-over-year change of -2.8% [4] - Asset management revenue reached $84.87 million, which is a 4.7% increase year-over-year but below the average estimate of $92.22 million [4] - Gain on originated residential mortgage loans, held-for-sale, net, was reported at $196.31 million, a 6.3% increase compared to the previous year, but also below the average estimate of $207.43 million [4] Stock Performance - Rithm's shares have returned -2.6% over the past month, contrasting with the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

Core Insights - Rithm (RITM) reported quarterly earnings of $0.54 per share, matching the Zacks Consensus Estimate and remaining consistent with the previous year's earnings [1] - The company achieved revenues of $1.11 billion for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 10.53% and showing significant growth from $619.51 million year-over-year [2] - Rithm's stock has underperformed compared to the S&P 500, gaining about 0.9% since the beginning of the year, while the S&P 500 has increased by 17.2% [3] Earnings Outlook - The future performance of Rithm's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - The current consensus EPS estimate for the upcoming quarter is $0.54, with projected revenues of $1.29 billion, and for the current fiscal year, the EPS estimate is $2.15 on revenues of $4.3 billion [7] Industry Context - The Financial - Miscellaneous Services industry, to which Rithm belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5][6]

Financial Data and Key Metrics Changes - The company generated approximately $300 million in earnings for shareholders, achieving an 18% return on equity (ROE) [4] - GAAP net income was reported at $193.7 million, or $0.35 per diluted share, with an 11% ROE [14] - Earnings available for distribution (EAD) was $297 million, or $0.54 per diluted share, marking the 24th consecutive quarter where EAD exceeded dividends paid [14] - The book value at the end of the quarter was $12.83, totaling $7.1 billion [14] - Cash and liquidity on the balance sheet stood at $2.2 billion [14] Business Line Data and Key Metrics Changes - Genesis Capital originated $1.2 billion in loans during the quarter, a 60% increase year over year [16] - The mortgage company, Newrez, reported a pre-tax income of approximately $295 million, up 7% quarter over quarter and 20% year over year, with a 20% ROE [33] - Direct origination production for Newrez increased by 32% year over year [34] - The servicing business generated $260 million in pre-tax income, an 11% increase year over year [36] Market Data and Key Metrics Changes - The company ended the quarter with a balance sheet of $47 billion, with Sculptor managing $37 billion in assets under management (AUM), Crestline with $18 billion, and Paramount with a $7 billion portfolio [10] - The demand for office space in New York is over 90% leased, while San Francisco is in the low 70% range, indicating a recovery in demand [8][28] Company Strategy and Development Direction - The company announced two acquisitions: Crestline, a credit manager, and Paramount, a Class A office REIT, to expand its product offerings without raising equity in capital markets [5][7] - The focus remains on performance rather than assets under management (AUM), aiming to provide fewer managers with more products to limited partners (LPs) [6] - The company is exploring opportunities in the energy space and plans to close its first Evergreen ABF fund on a leading wealth management platform [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position, highlighting strong earnings and the potential for growth through acquisitions and product offerings [10][90] - The company aims to drive more fee-related earnings (FRE) to enhance its valuation and is focused on growing its asset management business [42][44] - Management acknowledged the competitive landscape but emphasized their disciplined approach to underwriting and servicing, which differentiates them from peers [66] Other Important Information - The company is now involved in the insurance and reinsurance business, which it intends to grow over time [25] - The average rent for the Paramount portfolio is approximately $85 per foot, with significant potential for rent increases [8] Q&A Session Summary Question: Update on broader strategic vision and timelines - Management believes the company is fundamentally attractive from a value standpoint and is focused on growing asset management business to drive revaluation [41][42] Question: Update on third-party capital for Paramount transaction - The company expects to raise approximately $950 million to $1 billion from third parties, with $300 million to $500 million from Rithm [45][46] Question: Options for growing Rithm Capital - Management is exploring direct lending options and may consider share buybacks if growth does not materialize [55][56] Question: Discussion on Ginnie Mae streamlined refinances - These loans are cheaper to produce, impacting the gain on sale margin [51][54] Question: Share buybacks as a tool for valuation - Management indicated that the focus will be on continued growth rather than share buybacks, especially given the recent acquisitions [80] Question: Fundraising outlook for Sculptor - Management is optimistic about sustaining the fundraising pace into 2026, with significant investments planned in capital formation [82][84]

Financial Performance - Rithm Capital reported GAAP Net Income of $193.7 million, or $0.35 per diluted share, with an 11% Return on Equity[21] - Earnings Available for Distribution (EAD) reached $296.9 million, or $0.54 per diluted share, resulting in an 18% Return on Equity[21] - The company's book value stood at $7.1 billion, or $12.83 per common share[21] - Cash and liquidity amounted to $2.2 billion[21] Strategic Acquisitions - Rithm Capital entered into a definitive agreement to acquire Crestline Management, L P, with approximately $18 billion in AUM, on September 3, 2025[67] - A definitive agreement was also reached to acquire Paramount Group, Inc on September 17, 2025[26] - Rithm expects to have $1.3 billion of cash & cash equivalents after closing the Crestline and Paramount transactions[35] Business Segment Highlights - Genesis Capital's Q3 2025 origination volume reached $1.2 billion, representing a 60% year-over-year increase[27,99] - Newrez platform delivered 20% ROE in Q3'25, excluding MSR MTM and related hedge adjustment of ($61.0) million[117,124] - Sculptor had $1.4 billion of gross inflows in Q3'25, bringing Sculptor's AUM to $37 billion[33] - The total servicing portfolio for Newrez is $878 billion UPB[11]

Financial Performance - GAAP net income for Q3 2025 was $193.7 million, or $0.35 per diluted common share, down from $283.9 million, or $0.53 per diluted common share in Q2 2025[3] - Earnings available for distribution increased to $296.9 million, or $0.54 per diluted common share, consistent with Q2 2025[4] - Common dividend declared was $138.5 million, or $0.25 per common share, compared to $132.6 million in Q2 2025[3] - Net income attributable to common stockholders for the three months ended September 30, 2025, was $193,662 thousand, down from $283,899 thousand for the previous quarter, reflecting a decrease of approximately 31.8%[21] - The net income per diluted share decreased to $0.35 for the three months ended September 30, 2025, compared to $0.53 for the previous quarter[21] - Total Revenues for Q3 2025 reached $1,105,523,000, an increase from $1,217,039,000 in Q2 2025[22] - Interest income for Q3 2025 was $453,786,000, compared to $478,455,000 in Q2 2025, indicating a decline of about 5.2%[22] - Servicing revenue, net for Q3 2025 was $314,930,000, while in Q2 2025 it was $419,812,000, showing a decrease of approximately 25%[22] - Total Operating Expenses for Q3 2025 were $938,855,000, an increase from $951,850,000 in Q2 2025[22] Asset Management and Growth - Newrez LLC reported pre-tax income of $295.1 million in Q3 2025, up from $275.1 million in Q2 2025, with a 20% pre-tax return on equity on $6.2 billion of equity[7] - Rithm Capital's residential transitional lending platform, Genesis Capital, achieved origination volume of $1.2 billion in Q3 2025, a 60% increase year-over-year[7] - Sculptor Capital Management's assets under management grew to approximately $37 billion as of September 30, 2025, with gross fundraising inflows of $1.4 billion during the quarter[7] - Rithm Capital entered into a definitive agreement to acquire Crestline Management, L.P., which has $18 billion in assets under management, targeting a Q4 2025 closing[7] - The company also agreed to acquire Paramount Group, Inc. for approximately $1.6 billion in cash, with closing targeted for Q4 2025[7] - Total servicing unpaid principal balance reached $878 billion, a 7% year-over-year increase, including $282 billion from third-party servicing, which grew by 21% year-over-year[7] - Origination funded production volume was $16.4 billion in Q3 2025, reflecting a 3% year-over-year increase[7] Balance Sheet and Equity - Total assets increased to $47,165,394 thousand as of September 30, 2025, up from $44,315,953 thousand on June 30, 2025, representing a growth of approximately 6.5%[15] - Cash and cash equivalents increased to $1,610,958 thousand as of September 30, 2025, from $1,600,948 thousand as of June 30, 2025[15] - Total liabilities rose to $38,255,920 thousand as of September 30, 2025, compared to $35,995,781 thousand on June 30, 2025, indicating an increase of approximately 6.3%[15] - The company’s secured financing agreements increased to $16,538,685 thousand as of September 30, 2025, up from $15,897,778 thousand in the previous quarter[15] - Stockholders' equity increased to $8,612,685 thousand as of September 30, 2025, compared to $8,059,209 thousand as of June 30, 2025, reflecting an increase of approximately 6.9%[15] - Stockholders' Equity in Rithm Capital Corp. as of September 30, 2025, was $8,498,517,000, compared to $7,948,383,000 at the end of Q2 2025[22] Market Position and Strategy - The company has a diversified investment platform that includes residential and commercial lending, MSRs, and structured credit, enhancing its market position[25] - Rithm Capital emphasizes an owner-operator model through its subsidiaries, aiming to drive value for shareholders and fund investors[25] - The company reported a net realized and unrealized gain of $44,364 thousand for the three months ended September 30, 2025, compared to a loss of $16,931 thousand in the previous quarter[21] - The company reported a change in fair value of MSRs and MSR financing receivables of $(264,351,000) in Q3 2025, compared to $(155,005,000) in Q2 2025[22]