Rithm Capital (RITM) has surged 39.2% in past year, expected to continue growing

From Nasdaq: 2024-04-08 12:43:00

Rithm Capital Corp. (RITM) shares have surged by 39.2% over the past year, outperforming the industry average of 20% and the S&P 500 Index. With a market cap of $5.3 billion, the asset manager specializes in real estate and financial services sectors. Expansion and acquisition of customer loans are driving its performance.

Estimates show that Rithm Capital is on track for continued growth. The company is forecasted to have full-year earnings of $1.69 per share for 2024, with revenues expected to rise by 21.5%. The company’s high interest rate environment benefits its MSR portfolio, leading to a predicted 9.9% increase in interest income and a 4.1% rise in net servicing revenues for 2024.

Rithm Capital maintains a 9.2% dividend yield, significantly higher than the industry average of 2.2%. With the alternative asset space gaining popularity, the company is expected to see increased demand for its services. Strategic acquisitions, like the Sculptor deal, are enhancing its asset management business. Its Newrez business and servicing platform are key contributors to its growth.

However, investors should note some risks. Rithm Capital’s cash and cash equivalents decreased to $1.29 billion, while debt rose to $24 billion, resulting in a total debt-to-total capital ratio of 78.4%. Despite an 84% decline in free cash flow over the past year, strategic planning is expected to support long-term growth. Other top picks in the finance sector include Coinbase Global, Burford Capital, and American Express. Each shows strong potential for growth and performance in the market.

Read more at Nasdaq: Rithm Capital (RITM) Rises 39.2% in a Year: More Growth Ahead?