At a glance
Redwood Trust Inc is worth $409.5M. It pays a 22.09% dividend yield, and returned $591.9M to shareholders in dividends and buybacks over FY2021–FY2025. The stock returned −32.4% over the past year with dividends reinvested and −15.5% a year over five years, against +11.5% and +11.7% for the S&P 500. At its worst it fell 75.6% in the 2020 crash (S&P 500: 33.7%) and 54.4% in the 2022 bear market (S&P 500: 24.5%), and is still below its earlier high.
The business in plain English
Redwood Trust is a specialty finance company focused on housing credit: home loans and related investments. It targets growing parts of the U.S. housing market that government mortgage programs don't serve well. It has been taxed as a real estate investment trust (REIT) since 1994. A REIT generally avoids corporate income tax on the profits it pays out as dividends. Unlike REITs that own buildings, Redwood holds mortgages and mortgage securities.
It makes money in two main ways. The first is mortgage banking. Its Sequoia unit buys home loans from other lenders. Its CoreVest unit lends to real estate investors who renovate or rent out homes and apartment buildings. Redwood then sells the loans, keeps them, or packages them into bonds through its Sequoia and CAFL securitization programs. Securitization means pooling loans and selling bonds backed by their payments. Its Aspire brand, launched in 2025, buys loans approved using bank statements or a rental property's cash flow instead of standard income checks. The second is net interest income: the interest its investments earn minus the interest on its borrowing.
Redwood reports four segments. They are Sequoia Mortgage Banking, CoreVest Mortgage Banking, Redwood Investments (mainly the pieces of its own securitizations it keeps) and Legacy Investments (older assets being sold or wound down). CoreVest also earns fees for running two joint ventures with institutional investment managers.
Price history
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RWT -32.4% over the year to Oct 28, 2026, total return with dividends reinvested.
Latest results
- In Q2 FY2026 (ended Jun 30, 2026), revenue was —, and net income was $-1.1M.
- For fiscal 2025, revenue was — (— year over year) with a null% net margin.
Financial health check
| Return on equity (FY2025) | -7.1% weak |
|---|---|
| Return on assets (FY2025) | -0.3% weak |
| Fiscal year | Revenue | Net income | Free cash flow |
|---|---|---|---|
| FY2020 | — | $-581.8M | — |
| FY2021 | — | $319.6M | — |
| FY2022 | — | $-163.5M | — |
| FY2023 | — | $-2.3M | — |
| FY2024 | — | $54.0M | — |
| FY2025 | — | $-70.0M | — |
Valuation snapshot
| Market value | $409.5M |
|---|---|
| P/E ratio | — |
| Dividend yield | 22.09% |
Rank among 1514 US companies
Market value at each year end
Redwood Trust’s market value went from $1.17B at the end of 2016 to $409.5M on Oct 28, 2026, down 65%; since the end of 2025 it is down 42%.
Show as a table
| Year end | Market value | Change |
|---|---|---|
| Oct 28, 2026 | $409.5M | -41.5% |
| 2025 | $700.6M | -18.9% |
| 2024 | $863.7M | -1.8% |
| 2023 | $879.1M | +14.7% |
| 2022 | $766.2M | -49.3% |
| 2021 | $1.51B | +53.9% |
| 2020 | $982.7M | -47.3% |
| 2019 | $1.86B | +49.1% |
| 2018 | $1.25B | +9.4% |
| 2017 | $1.14B | -2.0% |
| 2016 | $1.17B |
Price behavior
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | |
|---|---|---|---|---|---|
| RWT price data to Oct 28, 2026 | -33.7% | -32.4% | -10.8% | -15.5% | -4.8% |
Show as a table
| Year | Price data |
|---|---|
| 2026 (to date) | -33.7% |
| 2025 | -4.2% |
| 2024 | -0.2% |
| 2023 | +21.9% |
| 2022 | -42.2% |
| 2021 | +60.2% |
| 2020 | -42.6% |
| 2019 | +18.1% |
| 2018 | +9.3% |
| 2017 | +4.5% |
| 2016 | +25.0% |
| 2015 | -27.9% |
| 2014 | +7.7% |
| 2013 | +21.4% |
| 2012 | +78.9% |
| 2011 | -26.3% |
| 2010 | +10.4% |
| 2009 | +3.5% |
| 2008 | -50.2% |
| 2007 | -32.5% |
| 2006 | +56.9% |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Lost 54.2% over that stretch · deepest drop along the way 76.8%, not recovered by the end of the data |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 75.6% over that stretch · deepest drop along the way 75.6%, not recovered by the end of the data |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 51.6% over that stretch · deepest drop along the way 54.4%, not recovered by the end of the data |
Insider activity
Form 4 filings from 2025-10-29 to 2026-10-29 (25 read): 6 open-market purchases ($969K) and 0 sales ($0.00).
| Date | Insider | Type | Value |
|---|---|---|---|
| Sep 15, 2026 | Christopher J Abate Chief Executive Officer, Director | buy | $384K |
| Sep 16, 2026 | Dashiell I Robinson President, Director | buy | $252K |
| Sep 15, 2026 | Greg H Kubicek Director | buy | $193K |
| Sep 15, 2026 | Brooke Carillo Chief Financial Officer | buy | $100K |
| Sep 21, 2026 | Andrew P Stone Chief Legal Officer | buy | $21K |
Who owns it
Large shareholders (13G filings)
| Wellington Management Group LLP | 17% | Sep 30, 2026 |
| BlackRock, Inc. | 8.9% | Jul 31, 2026 |
| Bay Pond Partners, L.P. | 5.7% | Sep 10, 2026 |
| Vanguard Capital Management | 5.29% | Mar 31, 2026 |
| Bay Pond Investors (Bermuda) L.P. | 5.1% | Aug 14, 2026 |
ETFs with the most weight in RWT
| REM iShares Mortgage Real Estate ETF | 1.7% |
| MORT VanEck Mortgage REIT Income ETF | 1.68% |
| SDIV Global X SuperDividend ETF | 0.89% |
| RZV Invesco S&P SmallCap 600® Pure Value ETF | 0.43% |
| PSCF Invesco S&P SmallCap Financials ETF | 0.22% |
| ISMD Inspire Small/Mid Cap ETF | 0.19% |
| VIOV Vanguard S&P Small-Cap 600 Value ETF | 0.14% |
| SLYV SPDR S&P 600 Small Cap Value ETF | 0.12% |
What could go wrong
- Needs buyers for its loans and bonds. Mortgage banking profits depend on selling loans to investors or packaging them into Sequoia and CAFL bonds. If investor demand fades or securitization rules tighten, loans may sit on the books or sell for less.
- Borrowed money can trigger margin calls. Redwood funds loans and investments with borrowed money. If asset values drop, lenders can demand more cash or collateral. A default under one borrowing agreement can also trigger defaults under others.
- Losses if housing borrowers stop paying. Redwood targets investments exposed to housing credit risk (the chance borrowers don't repay), mainly pieces of its own securitizations. Rising defaults, falling home prices or regional slumps where its loans cluster could cut earnings and dividends.
- Strategy overhaul may not pay off. In 2025, Redwood grouped older loans and non-core assets into a new Legacy Investments segment, to be sold or paid down over time. Sales could bring losses, and the simpler model may not improve results.
- Rules could hit home equity and rental loans. Home Equity Investments (HEI), where homeowners get cash for a share of future home value, could be regulated as mortgages or reverse mortgages. Rent control could cut the value of rental properties backing its investor loans.
- Interest rate swings hit volumes and values. Changes in benchmark rates and Federal Reserve actions affect how many loans Redwood can buy or make, and what its holdings are worth. Changes in how fast borrowers pay off loans early can also reduce earnings.
Recent events
- Quarterly results released; Investor presentation or announcement
- Major agreement signed; New debt or financial obligation; Unregistered sale of shares; Other company announcement
- Investor presentation or announcement; Other company announcement
- Quarterly results released; Investor presentation or announcement
- Quarterly results released; Investor presentation or announcement
- Investor presentation or announcement
- Major agreement signed; New debt or financial obligation
- Other company announcement
- Executive or board change; Shareholder vote results
- Quarterly results released; Investor presentation or announcement; Other company announcement
For income and retirement investors
As a REIT, Redwood intends to pay out at least 90% of the taxable income earned inside the REIT. The record is uneven. Dividends per share rose from $0.725 in fiscal 2020 to $0.92 in fiscal 2022 and fell to $0.67 in fiscal 2024. They then rose to $0.72 in fiscal 2025, a one-year streak of increases. That fiscal 2025 dividend was paid despite a loss of $0.63 per share. The yield was 22.09% as of October 28, 2026, mainly because the share price had dropped, and the 10-K warns dividends may be cut. Redwood bought back about $108 million of stock over fiscal 2021–2025, yet the share count grew 9.5% between November 2021 and August 2026. The shares fell 76.8% in the 2008 financial crisis, 75.6% in the 2020 COVID crash and 54.4% in the 2022 bear market. As of October 28, 2026, they had not regained those earlier peaks. Single stocks carry more risk than diversified funds.
Questions investors ask
How does Redwood Trust make money?
Mainly through mortgage banking and net interest income. Its Sequoia unit buys home loans from other lenders. Its CoreVest unit lends to real estate investors who own or fix up rental homes and apartment buildings. Redwood aims to profit when it sells those loans or packages them into bonds. It earns net interest income too: the interest its loans and securities pay, minus the interest on its borrowing. CoreVest also earns fees for running two joint ventures with institutional investment managers.
Does Redwood Trust raise its dividend every year?
No. Dividends per share rose from $0.67 in fiscal 2024 to $0.72 in fiscal 2025, a streak of just one year. Before that, the payout fell from $0.92 in fiscal 2022 to $0.71 in fiscal 2023 and $0.67 in fiscal 2024. From fiscal 2020 to fiscal 2025, regular dividends shrank by about 0.1% a year on average, so they were roughly flat. The 10-K warns that Redwood may reduce its dividends.
Why is Redwood Trust's dividend yield so high?
Mostly because the share price has fallen. The yield was 22.09% as of October 28, 2026, after the stock lost 33.7% between the start of 2026 and that date. A yield that high often signals that investors doubt the payout will last. Redwood paid $0.72 per share in dividends in fiscal 2025 while losing $0.63 per share, so earnings did not cover the dividend. It also reported a net loss of $1.1 million for the quarter ended June 30, 2026.
How much debt does Redwood Trust have?
About $22.5 billion as of June 30, 2026, against shareholders' equity of about $934 million and total assets of about $28.8 billion. The balance sheet includes securitization entities that accounting rules require Redwood to consolidate. The 10-K says those entities' liabilities are not Redwood's legal obligations, but Redwood is exposed to how their loans perform when it holds their securities. Redwood's own borrowing can still lead to margin calls, meaning lenders demand more cash or collateral if asset values fall.
How has Redwood Trust stock performed over the long run?
Poorly over the past one, five and ten years. As of October 28, 2026, the stock had lost 32.4% over one year, 57% over five years and 39% over ten years. Its deepest fall from a peak, across about 21 years of price history, was 88.8%. Calendar-year results have swung widely: down 42.6% in 2020 and 42.2% in 2022, but up 60.2% in 2021. Swings this size can be hard to live with for anyone drawing on savings.