One Of The Most Undervalued Income Stocks

Rithm Capital (RITM) is a company that has tremendously expanded its business over the last few years, but that growth has not shown up in its share price. I believe investors will eventually realize that this company should have a much higher share price. Maybe you can help.

Known as New Residential Corp when it launched in 2013, Rithm Capital started as a finance real estate investment trust (REIT), investing in mortgage servicing rights (MSRs) and other mortgage-related securities. Until the pandemic, the company was a steady dividend growth REIT.

The pandemic forced the company to slash its dividend by 90%, from $0.50 quarterly to $0.05. The dividend started growing immediately, but topped out at $0.25 in September 2021. It has stayed at that level since.

The bigger changes at Rithm Capital have been the expansion of its business operations into a diversified asset management company. Here are the currently owned businesses:

Asset-generating businesses are those with $54 billion under management.

Alternative Asset Management businesses are those with $61 billion under management.

● Sculptor Management was acquired for $720 million in November 2023.

● Crestline Management L.P., with $20 billion under management, was acquired on December 1, 2025.

Rithm Capital is now a multi-business company with $120 billion in assets. The company is very profitable. For the 2026 second quarter, earnings available for distribution (EAD) of $0.60 per share nicely exceeded the Wall Street consensus of $0.50. The company beat estimates for 17 out of the last 19 quarters. Analysts are consistently wrong about Rithm’s earnings potential.

Rithm Capital’s second-quarter book value was $12.33 per share.

Currently, RITM trades for $9.90, a 20% discount to the book value. The share price is down 20% over the last year, despite the tremendous profits. The $1.00 annual dividend is more than 200% covered.

My theory is that investors still view Rithm Capital as only operating as a finance REIT. The diversified businesses are not reflected in the share value.

If RITM traded for 1.2 times book, it would be at $15 per share. If it traded at 10 times annual EAD, it would be over $20.

Fortunately, this stock offers a 10% yield on its very stable dividend. I am happy to own shares until the investing public figures out that it should be worth $15 or more. You can get the ball rolling by buying some shares. If everyone who reads this article buys 100 shares, it would put some serious upward pressure on the share price.ortfolio recommendations from one of my newsletter services.