Starwood Property Trust: Target This REIT Amid Unfounded Private Credit Worries

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Private lending fears have spread far beyond the handful of companies that could be affected if there are actual problems with the $1.5 trillion that has been issued as private loans to corporations. I recommend you potentially take advantage of that by targeting Starwood Property Trust, advises Tim Plaehn, editor of The Dividend Hunter.

The contagion has spread to finance Real Estate Investment Trusts (REITs), which have nothing to do with private lending investments. When you get high-yield stocks where dividends are secure — and the market drives down the share price, pushing up the yield – it’s time to pick up some shares and lock in those yields.

Starwood launched in August 2009. The company was solely involved in commercial mortgage lending. This graphic from the most recent earnings presentation shows the diversification of the Starwood Property Trust portfolio.

Meanwhile, Starwood has paid an uninterrupted quarterly dividend of $0.48 per share since the start of 2014. Chairman and CEO Barry Sternlicht has repeatedly stated that Starwood Property Trust will continue to pay dividends.

While 2025 earnings came up a little short of the dividend, recent investments and acquisitions should quickly increase the payout coverage. I view the dividends from this 11%-yielding REIT as an ongoing annuity I can count on.

My recommended action would be to consider purchasing shares of Starwood Property Trust.

About the Author

Tim Plaehn is the lead research analyst for income and dividend investing at Investors Alley, a subsidiary of Magnifi Communities. He is the editor of The Dividend Hunter, Weekly Income Accelerator, and ETF Income Edge among other titles. Mr. Plaehn was formerly in the US Air Force serving as an F-16 fighter pilot and instructor. Several times a year, he offers live training courses on income investing, covered call trading, and portfolio management.