Starwood Property Trust, Inc. (NYSE:STWD) is a quality income vehicle with low core earnings volatility and robust dividend coverage that suggests that the company can sustain its current dividend payout. What's more, I am attracted to Starwood Property Trust's potential to improve its dividend coverage (and hike its dividend) based on the company's floating-rate loan portfolio. An investment in Starwood Property Trust throws off an 8.67 percent dividend yield at today's price point.
Commercial real estate finance companies have a place in every income investor's investment portfolio: They mostly invest in U.S.-based commercial real estate, offering income investors a compelling combination of income and capital appreciation prospects. I already owned Starwood Property Trust in my high-yield income portfolio, but have added last week on the dip. I am optimistic about Starwood Property Trust's value proposition for three specific reasons:
