RITM

AGNC Investment may have sufficient coverage now for its 16.7% dividend, but a continuation of current interest-rate trends could bode poorly for the mortgage rate. Annaly Capital Management has similar risks, but recent upbeat statements from management suggest a possible path to steadier payouts and stronger total returns.

Rithm Capital is rated Buy, while Dynex Capital is rated Hold, reflecting stronger dividend coverage and valuation for Rithm. RITM trades at 0.74x book with a 2.2x covered dividend, while DX trades at book value but pays out more than it earns. RITM's borrower-side exposure is more resilient in a rate-hiking environment; DX's bondholder model is vulnerable to spread widening and insufficient distributable earnings.

Investors interested in stocks from the Financial - Miscellaneous Services sector have probably already heard of Rithm (RITM) and SoFi Technologies, Inc. (SOFI). But which of these two companies is the best option for those looking for undervalued stocks?

Dividend-paying stocks, especially 'LoPrice/HiYield Dividend Dogs,' are positioned for strong total returns as market sentiment shifts from growth to income. Top ten LoPrice/HiYield Dogs are projected to deliver average net gains of 51.9% by October 2027, with some individual names like BXMT estimated at 76.17%. Twenty-nine of forty-two featured stocks show 'safer' dividends, supported by positive free cash flow, but thirteen rely on borrowed funds for payouts.

Rithm Capital remains a Buy as Q3 results validated its differentiated business model and book value resilience amid sector-wide mortgage REIT pressures. RITM's diversified portfolio—only ~20% traditional mortgage, ~80% operating businesses—insulates it from CRE credit and rate-driven sector headwinds. The mortgage servicing rights book demonstrated strength in Q3, benefiting from slower prepayment speeds and longer-lasting servicing fees as rates rose.

The average of price targets set by Wall Street analysts indicates a potential upside of 35.4% in Rithm (RITM). While the effectiveness of this highly sought-after metric is questionable, the positive trend in earnings estimate revisions might translate into an upside in the stock.

Rithm Capital trades at a 25% discount to book value, despite robust fundamentals and a fully covered 10.65% dividend yield. RITM's third-quarter earnings beat expectations, with EAD covering the dividend by 220% and net income rising to $0.38 per share. Management is prioritizing portfolio expansion over dividend hikes or buybacks, leveraging excess EAD for growth amid a challenging macro backdrop.

Rithm Capital trades at a 25% discount to book value, with upside skewed by its large mortgage servicing rights portfolio. RITM's $12.2B MSR portfolio benefits from rising rates, generating $121.3M in Q3 valuation gains and supporting robust distributable earnings. Dividend coverage remains strong at 220% in Q3, underpinned by MSR-driven profitability, despite sequential declines in asset management fees.

Rithm Capital NYSE: RITM reported third-quarter earnings available for distribution of $315 million, or $0.55 per diluted share, while GAAP net income totaled $217 million, or $0.38 per diluted share. Chairman, Chief Executive Officer and President Michael Nierenberg said the company's earnings available for distribution exceeded dividends paid for the 28th consecutive quarter.

While the top- and bottom-line numbers for Rithm (RITM) give a sense of how the business performed in the quarter ended September 2026, it could be worth looking at how some of its key metrics compare to Wall Street estimates and year-ago values.