Rithm Capital's Sector Comparative Analysis - Part 2 (Includes Q1 2026 + Q2 2026 Dividend Projection)

Core Insights - The article provides a detailed analysis comparing Rithm Capital Corp. (RITM) to 17 other mortgage real estate investment trusts (mREITs) [1] - The analysis is divided into two parts, with Part 1 focusing on RITM's recent results and metrics compared to peers, while Part 2 emphasizes dividend rates, yield percentages, and sustainability metrics [2][3] Part 1 Summary - RITM's book value as of September 30, 2025, is compared to 17 mREIT peers, aiding in understanding the company's financial standing [2] - The analysis aims to provide insights into RITM's performance relative to its peers, particularly in terms of dividend sustainability [4] Part 2 Summary - Part 2 focuses on RITM's dividend per share rates, yield percentages, and sustainability metrics compared to 17 mREIT peers [3] - RITM's dividend history shows an increase from $0.35 per share in Q3 2014 to $0.50 by Q4 2019, followed by a cautious reduction to $0.05 during Q1 2020 due to the COVID-19 pandemic [13][15] - RITM's dividend was increased to $0.10, $0.15, and $0.20 in 2020, and it has remained at $0.25 since Q3 2021, contrasting with many peers that reduced dividends [15] Dividend Analysis - RITM declared a dividend of $0.25 per share for Q4 2025, with a TTM dividend yield of 8.95% and an annual forward yield of 7.55% based on projected current book value [27][28] - The company has maintained a consistent dividend payout ratio, with figures indicating a very attractive ratio throughout 2023 and 2024 [21][22] - RITM's core earnings available for distribution (EAD) for Q1 to Q4 2023 were notably above the dividend rate, indicating strong earnings power [21] Future Projections - RITM is projected to have a very high probability (90%) of maintaining a dividend between $0.25 and $0.30 per share for Q1 and Q2 2026 [29] - The company is expected to see an improvement in adjusted core earnings/EAD in Q4 2025 compared to Q3 2025, despite a slight decrease anticipated in Q1 2026 [30] Investment Recommendation - The current recommendation for RITM is a "STRONG BUY" based on its undervalued stock price relative to projected current book value [33][34] - The price target for RITM is approximately $14.60 per share, with specific ranges for buy, hold, and sell recommendations based on stock price movements [34][35]