NRZ 0.00%↑ is one of my most extensive holdings and is in greens. It is 5% of my dividend growth portfolio. I wrote about NRZ 0.00%↑ in May when it went up 10% in a day. You can read about it here. We have some exciting updates on NRZ 0.00%↑ today.
Overview
♻️ Change in name
📊 Q2 Earnings report
🔮 Future
♻️ Change in name
New Residential ($NRZ) Investment has rebranded as Rithm ($RITM). The name change is resultant of the internalization of its management. The internalization resulted in the ending of the management and advisory agreement with FIG LLC. It means they will manage internally instead of being managed by an external company or an affiliate. They will however retain FIG employees who currently serve in key positions, including those who support the company’s investment, legal, accounting, tax, and treasury operations.
New Residential (NRZ) agreed to pay its manager FIG LLC $400M, with $200M paid on Friday, $100M to be paid on Sept. 15, 2022, and $100M to be paid on Dec. 15, 2022. This move was made to increase savings for investors. The expected saving will be $60M-$65M per year (approximately $0.12 to $0.13 per diluted share).
📊 Q2 Earnings report
NRZ or RITM announced Q2 ER on 2nd August 2022. They matched the EPS consensus at $0.31 per diluted share. Total revenue of $1.32B vs. $1.12B consensus was a beat. Lower expenses mostly aided it. Overall it was a decent quarter.
🔮 Future
I think internalizing the management can be a good thing for RITM and is generally more shareholder-friendly as its decreases the expense (that should be paid to external managers), and fewer conflicts.
I still see it has the potential to reinstate its $0.5 dividend and ability to beat the market. YTD NRZ is still beating the SP50. Its fair value hovers around $12.74, and with my average price of $9.98, I have the potential of 27.66% (discount). So, I will be holding stock.
One of the few key metrics to watch out for an mREIT stock is the payout ratio which sits acceptable around the 60s (still low). Forward estimates look good at 75%.
Note: mREITs are highly risky assets despite having a high dividend yield.