Buy Starwood Property Trust
Today I am establishing a short-term position in Starwood Property Trust (NYSE:STWD) for 30 Day Dividends. Buy STWD up to $21.95 per share.
STWD is also a long term holding of my buy-and-hold newsletter: The Dividend Hunter. The company reports tax information on a 1099.
Starwood Property Trust is a commercial mortgage REIT. This is a very high quality finance REIT with a current yield of 8.8%. Over the last two months the share price has dropped from $24.50 to around $22.50. The shares went ex-dividend on Friday, June 26 producing another $0.50 drop and the shares dropped an additional 2% after the ex-dividend date to form a post ex-dividend bottom.
There is a strong probability that STWD will increase its dividend rate when earnings are announced on August 4. The board has also approved a $450 million share buyback to take advantage of low share prices That potential plus an expected strong earnings report should push the share price back up above $24. Earnings come out in early August, and the next ex-dividend date will be at the end of September.
Recommendation: Buy STWD below $21.85. Target price of $24 for a 10% gain.
The position will be closed out before the next ex-dividend date in late September.