Is Rithm Capital Stock a Buy?
Dividend stocks can be an excellent source of passive income, and Rithm Capital (NYSE: RITM) is one of the highest-yielding dividend stocks you can buy today. Its 9.1% dividend yield makes it an appealing stock for investors looking to generate income from their portfolios, and the stock trades at a reasonable valuation. However, it is undergoing a transformation that could affect its high dividend yield. Here's what you need to know if you're considering buying Rithm Capital today.
Rithm Capital is a mortgage real estate investment trust (REIT) that focuses on mortgage servicing rights. As a REIT, Rithm Capital enjoys a pass-through tax structure, meaning it doesn't pay taxes at a corporate level. Instead, it must pay out 90% of its taxable income to shareholders through dividends, which is why REITs can be quite attractive for income-focused investors.
Rithm differs from mortgage REITs because its portfolio includes businesses in the real estate sector to complement its mortgage-backed securities and loans portfolio. Its holdings include the Newrez residential mortgage origination unit and business lending specialist Genesis, along with mortgage servicing rights, single-family rentals, and loans.
Source Fool.com
