How might STWD's EPS evolve in Q1 2025?

**STWD's EPS is likely to remain under pressure in Q1 2025** due to the following factors:

1. **Dividend Payout Ratio Concerns**: STWD has a dividend payout ratio of 94.6%, which is relatively high. This indicates that the company's dividend is currently covered by earnings but may not be in the future if the company's earnings decline. A high dividend payout ratio can often be a sign of management prioritizing dividends over reinvestment in the business, which could potentially impact the company's earnings growth.
2. **Earnings Estimate Shortfall**: Although STWD exceeded distributable earnings expectations for the fourth quarter, the company reported its third consecutive quarter of a dividend. This suggests that the company's earnings may not be growing at a rate that comfortably supports its dividend payout.
3. **Market Conditions and Interest Rates**: As a real estate investment trust, STWD's earnings are influenced by market conditions and interest rates. If Q1 2025 is characterized by similar conditions to those of the fourth quarter, with potentially rising interest rates, this could put additional pressure on the company's earnings, particularly if it is operating in a competitive lending environment with lower demand for loans.

In conclusion, while STWD has recently exceeded earnings expectations, the high dividend payout ratio and the need to support its dividend, combined with potential headwinds from market conditions and interest rates, suggest that the company's EPS may not show significant improvement in Q1 2025.