Intrinsic value of Starwood Property Trust - STWD

Previous Close

$21.95

  Intrinsic Value

$41.08

stock screener

  Rating & Target

str. buy

+87%

  Value-price divergence*

-13%

Previous close

$21.95

 
Intrinsic value

$41.08

 
Up/down potential

+87%

 
Rating

str. buy

 
Value-price divergence*

-13%

Our model is not good at valuating stocks of financial companies, such as STWD.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of STWD stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 5.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  6.66
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.31
  5.28
  5.25
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
  5.05
Revenue, $m
  785
  832
  881
  932
  986
  1,042
  1,100
  1,161
  1,224
  1,291
  1,360
  1,433
  1,509
  1,589
  1,672
  1,760
  1,851
  1,947
  2,048
  2,153
  2,264
  2,380
  2,502
  2,629
  2,763
  2,903
  3,051
  3,205
  3,367
  3,537
  3,716
Variable operating expenses, $m
 
  612
  647
  684
  722
  762
  804
  848
  893
  941
  991
  1,029
  1,084
  1,141
  1,201
  1,264
  1,330
  1,399
  1,471
  1,547
  1,626
  1,709
  1,797
  1,888
  1,984
  2,085
  2,191
  2,302
  2,418
  2,540
  2,669
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  660
  612
  647
  684
  722
  762
  804
  848
  893
  941
  991
  1,029
  1,084
  1,141
  1,201
  1,264
  1,330
  1,399
  1,471
  1,547
  1,626
  1,709
  1,797
  1,888
  1,984
  2,085
  2,191
  2,302
  2,418
  2,540
  2,669
Operating income, $m
  125
  221
  234
  249
  264
  280
  296
  313
  331
  350
  369
  404
  425
  448
  471
  496
  522
  549
  577
  607
  638
  671
  705
  741
  779
  818
  860
  903
  949
  997
  1,047
EBITDA, $m
  187
  274
  290
  307
  324
  343
  362
  382
  403
  424
  447
  471
  496
  522
  550
  579
  609
  640
  673
  708
  745
  783
  823
  865
  909
  955
  1,003
  1,054
  1,107
  1,163
  1,222
Interest expense (income), $m
  185
  217
  292
  447
  608
  777
  952
  1,136
  1,327
  1,528
  1,737
  1,956
  2,185
  2,425
  2,676
  2,939
  3,215
  3,503
  3,806
  4,123
  4,455
  4,803
  5,168
  5,551
  5,953
  6,375
  6,817
  7,281
  7,767
  8,278
  8,814
Earnings before tax, $m
  376
  3
  -58
  -198
  -345
  -497
  -656
  -823
  -996
  -1,178
  -1,368
  -1,552
  -1,760
  -1,977
  -2,205
  -2,443
  -2,693
  -2,954
  -3,228
  -3,516
  -3,817
  -4,132
  -4,463
  -4,810
  -5,174
  -5,556
  -5,957
  -6,377
  -6,818
  -7,281
  -7,767
Tax expense, $m
  8
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  365
  3
  -58
  -198
  -345
  -497
  -656
  -823
  -996
  -1,178
  -1,368
  -1,552
  -1,760
  -1,977
  -2,205
  -2,443
  -2,693
  -2,954
  -3,228
  -3,516
  -3,817
  -4,132
  -4,463
  -4,810
  -5,174
  -5,556
  -5,957
  -6,377
  -6,818
  -7,281
  -7,767

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  616
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  77,256
  83,210
  88,119
  93,239
  98,581
  104,157
  109,979
  116,063
  122,421
  129,069
  136,023
  143,298
  150,913
  158,885
  167,233
  175,977
  185,138
  194,738
  204,800
  215,347
  226,405
  238,001
  250,161
  262,916
  276,295
  290,330
  305,055
  320,504
  336,716
  353,728
  371,581
Adjusted assets (=assets-cash), $m
  76,640
  83,210
  88,119
  93,239
  98,581
  104,157
  109,979
  116,063
  122,421
  129,069
  136,023
  143,298
  150,913
  158,885
  167,233
  175,977
  185,138
  194,738
  204,800
  215,347
  226,405
  238,001
  250,161
  262,916
  276,295
  290,330
  305,055
  320,504
  336,716
  353,728
  371,581
Revenue / Adjusted assets
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
  0.010
Average production assets, $m
  211
  223
  236
  250
  264
  279
  295
  311
  328
  346
  365
  384
  404
  426
  448
  472
  496
  522
  549
  577
  607
  638
  670
  705
  740
  778
  818
  859
  902
  948
  996
Working capital, $m
  0
  -653
  -692
  -732
  -774
  -818
  -863
  -911
  -961
  -1,013
  -1,068
  -1,125
  -1,185
  -1,247
  -1,313
  -1,381
  -1,453
  -1,529
  -1,608
  -1,690
  -1,777
  -1,868
  -1,964
  -2,064
  -2,169
  -2,279
  -2,395
  -2,516
  -2,643
  -2,777
  -2,917
Total debt, $m
  6,201
  8,356
  12,774
  17,382
  22,190
  27,208
  32,449
  37,924
  43,646
  49,629
  55,887
  62,435
  69,288
  76,463
  83,976
  91,846
  100,091
  108,731
  117,787
  127,279
  137,232
  147,668
  158,612
  170,091
  182,132
  194,764
  208,016
  221,921
  236,511
  251,822
  267,890
Total liabilities, $m
  72,734
  74,889
  79,307
  83,915
  88,723
  93,741
  98,982
  104,457
  110,179
  116,162
  122,420
  128,968
  135,821
  142,996
  150,509
  158,379
  166,624
  175,264
  184,320
  193,812
  203,765
  214,201
  225,145
  236,624
  248,665
  261,297
  274,549
  288,454
  303,044
  318,355
  334,423
Total equity, $m
  4,522
  8,321
  8,812
  9,324
  9,858
  10,416
  10,998
  11,606
  12,242
  12,907
  13,602
  14,330
  15,091
  15,888
  16,723
  17,598
  18,514
  19,474
  20,480
  21,535
  22,641
  23,800
  25,016
  26,292
  27,629
  29,033
  30,505
  32,050
  33,672
  35,373
  37,158
Total liabilities and equity, $m
  77,256
  83,210
  88,119
  93,239
  98,581
  104,157
  109,980
  116,063
  122,421
  129,069
  136,022
  143,298
  150,912
  158,884
  167,232
  175,977
  185,138
  194,738
  204,800
  215,347
  226,406
  238,001
  250,161
  262,916
  276,294
  290,330
  305,054
  320,504
  336,716
  353,728
  371,581
Debt-to-equity ratio
  1.371
  1.000
  1.450
  1.860
  2.250
  2.610
  2.950
  3.270
  3.570
  3.850
  4.110
  4.360
  4.590
  4.810
  5.020
  5.220
  5.410
  5.580
  5.750
  5.910
  6.060
  6.200
  6.340
  6.470
  6.590
  6.710
  6.820
  6.920
  7.020
  7.120
  7.210
Adjusted equity ratio
  0.051
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  365
  3
  -58
  -198
  -345
  -497
  -656
  -823
  -996
  -1,178
  -1,368
  -1,552
  -1,760
  -1,977
  -2,205
  -2,443
  -2,693
  -2,954
  -3,228
  -3,516
  -3,817
  -4,132
  -4,463
  -4,810
  -5,174
  -5,556
  -5,957
  -6,377
  -6,818
  -7,281
  -7,767
Depreciation, amort., depletion, $m
  62
  53
  55
  58
  60
  63
  66
  69
  72
  75
  78
  67
  71
  75
  79
  83
  87
  92
  96
  101
  106
  112
  118
  124
  130
  137
  143
  151
  158
  166
  175
Funds from operations, $m
  698
  56
  -3
  -140
  -284
  -434
  -591
  -754
  -925
  -1,103
  -1,290
  -1,485
  -1,689
  -1,903
  -2,126
  -2,360
  -2,606
  -2,863
  -3,132
  -3,414
  -3,710
  -4,020
  -4,346
  -4,687
  -5,045
  -5,420
  -5,814
  -6,227
  -6,660
  -7,115
  -7,592
Change in working capital, $m
  141
  -37
  -39
  -40
  -42
  -44
  -46
  -48
  -50
  -52
  -55
  -57
  -60
  -63
  -66
  -69
  -72
  -75
  -79
  -83
  -87
  -91
  -95
  -100
  -105
  -110
  -116
  -121
  -127
  -134
  -140
Cash from operations, $m
  557
  93
  36
  -100
  -242
  -390
  -545
  -706
  -875
  -1,051
  -1,235
  -1,428
  -1,629
  -1,840
  -2,061
  -2,292
  -2,534
  -2,787
  -3,053
  -3,332
  -3,623
  -3,929
  -4,250
  -4,587
  -4,940
  -5,310
  -5,698
  -6,105
  -6,533
  -6,981
  -7,452
Maintenance CAPEX, $m
  0
  -37
  -39
  -41
  -44
  -46
  -49
  -52
  -55
  -58
  -61
  -64
  -67
  -71
  -75
  -79
  -83
  -87
  -92
  -96
  -101
  -106
  -112
  -118
  -124
  -130
  -137
  -143
  -151
  -158
  -166
New CAPEX, $m
  0
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -28
  -30
  -31
  -33
  -34
  -36
  -38
  -39
  -41
  -43
  -46
  -48
Cash from investing activities, $m
  -813
  -50
  -52
  -55
  -58
  -61
  -65
  -68
  -72
  -76
  -80
  -83
  -87
  -92
  -97
  -102
  -108
  -113
  -119
  -124
  -131
  -137
  -145
  -152
  -160
  -168
  -176
  -184
  -194
  -204
  -214
Free cash flow, $m
  -256
  43
  -16
  -155
  -300
  -452
  -609
  -774
  -946
  -1,126
  -1,314
  -1,511
  -1,717
  -1,932
  -2,158
  -2,394
  -2,641
  -2,900
  -3,172
  -3,456
  -3,754
  -4,067
  -4,395
  -4,739
  -5,099
  -5,477
  -5,874
  -6,290
  -6,727
  -7,185
  -7,666
Issuance/(repayment) of debt, $m
  511
  2,155
  4,418
  4,608
  4,808
  5,018
  5,241
  5,475
  5,722
  5,983
  6,258
  6,548
  6,853
  7,175
  7,513
  7,870
  8,245
  8,640
  9,056
  9,493
  9,952
  10,436
  10,944
  11,479
  12,041
  12,632
  13,252
  13,905
  14,590
  15,311
  16,068
Issuance/(repurchase) of shares, $m
  430
  4,412
  549
  710
  879
  1,055
  1,239
  1,431
  1,632
  1,843
  2,063
  2,280
  2,521
  2,774
  3,040
  3,318
  3,609
  3,914
  4,235
  4,570
  4,923
  5,292
  5,679
  6,086
  6,512
  6,960
  7,429
  7,922
  8,439
  8,982
  9,552
Cash from financing (excl. dividends), $m  
  963
  6,567
  4,967
  5,318
  5,687
  6,073
  6,480
  6,906
  7,354
  7,826
  8,321
  8,828
  9,374
  9,949
  10,553
  11,188
  11,854
  12,554
  13,291
  14,063
  14,875
  15,728
  16,623
  17,565
  18,553
  19,592
  20,681
  21,827
  23,029
  24,293
  25,620
Total cash flow (excl. dividends), $m
  705
  6,611
  4,951
  5,163
  5,386
  5,621
  5,870
  6,132
  6,408
  6,700
  7,007
  7,316
  7,658
  8,017
  8,395
  8,794
  9,213
  9,654
  10,118
  10,607
  11,121
  11,661
  12,229
  12,826
  13,454
  14,114
  14,808
  15,537
  16,303
  17,108
  17,954
Retained Cash Flow (-), $m
  -382
  -4,415
  -549
  -710
  -879
  -1,055
  -1,239
  -1,431
  -1,632
  -1,843
  -2,063
  -2,280
  -2,521
  -2,774
  -3,040
  -3,318
  -3,609
  -3,914
  -4,235
  -4,570
  -4,923
  -5,292
  -5,679
  -6,086
  -6,512
  -6,960
  -7,429
  -7,922
  -8,439
  -8,982
  -9,552
Prev. year cash balance distribution, $m
 
  616
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  2,812
  4,402
  4,452
  4,507
  4,567
  4,631
  4,701
  4,776
  4,857
  4,944
  5,037
  5,136
  5,242
  5,355
  5,476
  5,604
  5,740
  5,884
  6,037
  6,198
  6,369
  6,550
  6,740
  6,942
  7,154
  7,378
  7,615
  7,864
  8,126
  8,402
Discount rate, %
 
  9.30
  9.77
  10.25
  10.77
  11.30
  11.87
  12.46
  13.09
  13.74
  14.43
  15.15
  15.91
  16.70
  17.54
  18.41
  19.33
  20.30
  21.32
  22.38
  23.50
  24.68
  25.91
  27.20
  28.57
  29.99
  31.49
  33.07
  34.72
  36.46
  38.28
PV of cash for distribution, $m
 
  2,572
  3,654
  3,322
  2,994
  2,673
  2,363
  2,066
  1,786
  1,524
  1,285
  1,067
  874
  704
  558
  434
  331
  248
  182
  130
  91
  62
  41
  27
  17
  10
  6
  3
  2
  1
  1
Current shareholders' claim on cash, %
  100
  52.9
  50.2
  47.2
  44.0
  40.5
  37.1
  33.6
  30.3
  27.0
  24.0
  21.2
  18.6
  16.3
  14.1
  12.2
  10.5
  9.0
  7.7
  6.5
  5.5
  4.7
  3.9
  3.3
  2.8
  2.3
  1.9
  1.6
  1.3
  1.1
  0.9

Starwood Property Trust, Inc. is a real estate investment trust. The Company operates through three business segments: Real estate lending (the Lending Segment), which engages primarily in originating, acquiring, financing and managing commercial first mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), residential mortgage-backed securities, and other real estate and real estate-related debt investments; Real estate investing and servicing (the Investing and Servicing Segment), which includes a servicing business in the United States that manages and works out problem assets; an investment business that selectively acquires and manages unrated, investment grade and non-investment grade rated CMBS, and a mortgage loan business, and Real estate property (the Property Segment), which engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties.

FINANCIAL RATIOS  of  Starwood Property Trust (STWD)

Valuation Ratios
P/E Ratio 15.6
Price to Sales 7.3
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 10.2
Price to Free Cash Flow 10.2
Growth Rates
Sales Growth Rate 6.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 137.1%
Total Debt to Equity 137.1%
Interest Coverage 3
Management Effectiveness
Return On Assets 0.7%
Ret/ On Assets - 3 Yr. Avg. 0.6%
Return On Total Capital 3.6%
Ret/ On T. Cap. - 3 Yr. Avg. 4.9%
Return On Equity 8.4%
Return On Equity - 3 Yr. Avg. 10.6%
Asset Turnover 0
Profitability Ratios
Gross Margin 55.5%
Gross Margin - 3 Yr. Avg. 57.1%
EBITDA Margin 79.4%
EBITDA Margin - 3 Yr. Avg. 88.2%
Operating Margin 15.9%
Oper. Margin - 3 Yr. Avg. 24.4%
Pre-Tax Margin 47.9%
Pre-Tax Margin - 3 Yr. Avg. 62.1%
Net Profit Margin 46.5%
Net Profit Margin - 3 Yr. Avg. 59.4%
Effective Tax Rate 2.1%
Eff/ Tax Rate - 3 Yr. Avg. 3.4%
Payout Ratio 125.5%

STWD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the STWD stock intrinsic value calculation we used $785 million for the last fiscal year's total revenue generated by Starwood Property Trust. The default revenue input number comes from 2016 income statement of Starwood Property Trust. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our STWD stock valuation model: a) initial revenue growth rate of 6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 9.3%, whose default value for STWD is calculated based on our internal credit rating of Starwood Property Trust, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Starwood Property Trust.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of STWD stock the variable cost ratio is equal to 73.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for STWD stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Starwood Property Trust.

Corporate tax rate of 27% is the nominal tax rate for Starwood Property Trust. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the STWD stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for STWD are equal to 26.8%.

Life of production assets of 5.7 years is the average useful life of capital assets used in Starwood Property Trust operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for STWD is equal to -78.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4522 million for Starwood Property Trust - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 261.026 million for Starwood Property Trust is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Starwood Property Trust at the current share price and the inputted number of shares is $5.7 billion.

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COMPANY NEWS

▶ Starwood Property Trust posts 2Q profit   [Aug-09-17 02:58PM  Associated Press]
▶ The TPG RE Finance IPO: What Investors Need to Know   [Jul-12-17 07:46AM  Motley Fool]
▶ [$$] Two Mortgage REITs Set for Earnings Upside   [Jun-13-17 11:52AM  Barrons.com]
▶ Starwood Property Trust posts 1Q profit   [May-09-17 08:21AM  Associated Press]
▶ Credit Suisse: 4 Picks in Mortgage REITs   [Apr-19-17 03:20PM  Barrons.com]
▶ Income-REIT New Residential Investment Looks Worth It   [Apr-12-17 04:43PM  TheStreet.com]
▶ 5 Top Dividend Stocks in Mortgage REITs   [Apr-05-17 08:47AM  Motley Fool]
▶ Is Real Estate the 'Sleeper Buy' for 2017?   [Mar-06-17 05:48PM  GuruFocus.com]
▶ 3 Reliable Dividend Stocks Yielding 7% or More   [Nov-30-16 10:00AM  at Kiplinger]
Financial statements of STWD
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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