Granite Point Mortgage Trust Inc. Announces First Quarter 2024 Common and Preferred Stock Dividends
Granite Point Mortgage Trust Inc. (GPMT) announced a quarterly cash dividend of $0.15 per share for common stock and $0.4375 per share for Series A Preferred Stock for the first quarter of 2024. The dividend is payable on April 15, 2024. The Board considered factors like nonaccrual loans, leverage, real estate market trends, and interest rate expectations. The company aims for distributable earnings to cover the dividend, but near-term profitability may be impacted by nonaccrual loans.
The declaration of a quarterly cash dividend by Granite Point Mortgage Trust Inc. reflects the company's commitment to providing shareholder returns despite the challenges highlighted by the CEO, including the impact of nonaccrual loans and the current state of the commercial real estate market. The dividend payment indicates a level of confidence in the company's liquidity and financial stability, as dividends are typically paid out from earnings or retained earnings. However, it's important to consider the sustainability of such dividends, especially in light of the mentioned nonaccrual loans which could signal potential issues in asset quality and future cash flows.
Investors should analyze the dividend yield in relation to the company's earnings to assess whether the dividend payments are at a sustainable payout ratio. Additionally, the reference to 'distributable earnings before losses' suggests that the company is considering non-cash expenses and potential future losses in its dividend policy, which could be a prudent approach in a volatile market. Understanding the company's capital structure and leverage is also critical, as a 'low level of leverage' can be a positive sign of risk management but may also impact the company's return on equity.
The commercial real estate market trends and the anticipation of future interest rate cuts are external factors that can significantly influence Granite Point's performance. The commercial real estate market is currently experiencing some dislocation, as indicated by the CEO, which can affect property values and, consequently, the performance of mortgage trusts like GPMT. The ability to resolve nonaccrual loans is important for the trust's financial health and investor confidence.
Investors should monitor broader market trends, including interest rate movements and real estate market indicators, to predict how these might affect GPMT's asset performance and profitability. The reference to 'market expectations for future interest rate cuts' is particularly noteworthy, as lower interest rates can reduce borrowing costs and potentially stimulate the real estate market, but they can also lead to narrower interest margins for mortgage REITs.
Granite Point's strategy in dealing with the challenges posed by nonaccrual loans is pivotal. Nonaccrual loans are loans on which interest is overdue and full collection of principal is uncertain, which can be a red flag for REITs that specialize in mortgage lending. The management's plan to cover dividends over time through distributable earnings before losses indicates a forward-looking approach to financial planning. However, the resolution of nonaccrual loans is a complex process that requires careful management of the properties and loans in question.
For a mortgage REIT like GPMT, the quality of the loan portfolio is a key determinant of financial health. The company's ability to navigate the 'dislocated market' and improve its 'run-rate earnings' post-resolution of these loans will be critical for long-term sustainability. Investors would benefit from a deeper analysis of the company's loan portfolio, historical loss rates and strategies for managing and recovering from nonaccrual loans.
03/14/2024 - 04:42 PM
NEW YORK --(BUSINESS WIRE)--
Granite Point Mortgage Trust Inc. $0.15
The Company’s Board of Directors also declared a quarterly cash dividend of $0.43 757.00% Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock for the first quarter of 2024. This dividend is payable on April 15, 2024, to the holders of record of the Series A Preferred Stock at the close of business on April 1, 2024.
“When establishing the new quarterly dividend, our Board evaluated a number of factors, including the impact of nonaccrual loans on our near-to-medium-term profitability, our low level of leverage, the ongoing trends in the commercial real estate market, and market expectations for future interest rate cuts,” said Jack Taylor, President and Chief Executive Officer of Granite Point. “We believe that over time our distributable earnings before losses will cover the dividend; however, in the near-term our nonaccrual loans will impact our profitability and resolving them will require some time, given the dislocated market. Once we resolve these loans we expect our run-rate earnings to improve.”
About Granite Point Mortgage Trust Inc.
Granite Point Mortgage Trust Inc. is a Maryland corporation focused on directly originating, investing in and managing senior floating-rate commercial mortgage loans and other debt and debt-like commercial real estate investments. Granite Point is headquartered in New York, NY . Additional information is available at www.gpmtreit.com.
Forward-Looking Statements
This press release contains, or incorporates by reference, not only historical information, but also forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature and can be identified by words such as “anticipate,” “estimate,” “will,” “should,” “expect,” “target,” “believe,” “outlook,” “potential,” “continue,” “intend,” “seek,” “plan,” “goals,” “future,” “likely,” “may” and similar expressions or their negative forms, or by references to strategy, plans or intentions. The illustrative examples herein are forward-looking statements. Our expectations, beliefs and estimates are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and estimates will prove to be correct or be achieved, and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.
These forward-looking statements are subject to risks and uncertainties, including, among other things, those described in our Annual Report on Form 10-K for the year ended December 31, 2023, under the caption “Risk Factors,” and our subsequent filings made with the SEC. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise.
Additional Information
Stockholders of Granite Point and other interested persons may find additional information regarding the Company at the Securities and Exchange Commission’s Internet site at www.sec.gov or by directing requests to: Granite Point Mortgage Trust Inc., 3 Bryant Park, 24th floor, New York, NY 10036, telephone (212) 364-5500.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240314231157/en/
Investors: Chris Petta, Investor Relations, Granite Point Mortgage Trust Inc., (212) 364-5500, investors@gpmtreit.com
Source: Granite Point Mortgage Trust Inc.
What is the quarterly cash dividend declared by Granite Point Mortgage Trust Inc. for the first quarter of 2024?
Granite Point Mortgage Trust Inc. declared a quarterly cash dividend of $0.15 per share for common stock and $0.4375 per share for Series A Preferred Stock for the first quarter of 2024.
When will the quarterly cash dividend be payable?
The dividend is payable on April 15, 2024.
Who is the President and Chief Executive Officer of Granite Point Mortgage Trust Inc.?
Jack Taylor is the President and Chief Executive Officer of Granite Point Mortgage Trust Inc.
What factors did the Board consider when establishing the new quarterly dividend?
The Board considered factors such as the impact of nonaccrual loans, leverage, commercial real estate market trends, and market expectations for future interest rate cuts.
How does Granite Point Mortgage Trust Inc. expect its run-rate earnings to improve?
Once the company resolves nonaccrual loans, it expects its run-rate earnings to improve.
