Ready Capital: A Mortgage REIT Still in Transition with Potential Dividend Cuts

Ready Capital, a mortgage REIT, is still transitioning with potential dividend cuts. The company has a distressed portfolio and Q2 2025 results have raised concerns. As a finance expert, I would recommend caution when investing in Ready Capital due to its uncertain future. The company's performance and dividend payments may be impacted by the ongoing transition and potential cuts.

Ready Capital Corp (RC) reported a quarterly adjusted loss of 14 cents per share for the quarter ended June 30, 2025, falling short of analyst expectations and marking a significant deviation from the same period last year. The company’s revenue declined by 66.8% to $16.90 million, well below the expected $46.98 million, indicating a challenging quarter for the mortgage REIT. RC’s shares have fallen by 3.4% this quarter and lost 38.1% so far this year, reflecting investor concerns over the company’s performance and uncertain future.

Analysts had anticipated earnings of one cent per share, but RC reported a loss of 34 cents per share, leading to a 17.24% negative surprise. The company’s quarterly loss amounted to $57.49 million, a substantial increase from the $33.2 million reported in the same period last year. The mean earnings estimate of analysts had fallen by about 89.5% in the last three months, highlighting the growing pessimism surrounding the company’s prospects.

The company’s portfolio is distressed, and it is in the midst of a transition that could lead to potential dividend cuts. The ongoing transition and potential dividend cuts pose significant risks to RC’s financial health and dividend payments. The company’s economic book value per share decreased to $13.69, down 1% from March, reflecting the challenges it faces in managing its portfolio and maintaining its dividend payouts.

MFA Financial, another mortgage REIT, also reported earnings that missed analyst expectations, posting an EPS of $0.24 compared to the forecasted $0.29, marking a 17.24% negative surprise. Revenue came in at $61.28 million, slightly below the expected $61.53 million. The stock price of MFA Financial decreased by 1.74% in pre-market trading following the earnings announcement, reflecting investor concerns over the earnings miss.

Investors should exercise caution when considering an investment in Ready Capital Corp due to its uncertain future and potential dividend cuts. The company’s performance and dividend payments may be impacted by the ongoing transition and potential cuts, making it a high-risk investment for those seeking stable returns.

References:

[1] Reuters. (2025). Ready Capital Corp reports results for the quarter ended June 30. Retrieved from https://www.tradingview.com/news/reuters.com,2025:newsml_L8N3U00U5:0-ready-capital-corp-reports-results-for-the-quarter-ended-june-30-earnings-summary/

[2] Investing.com. (2025). Earnings call transcript: MFA Financial Q2 2025 misses EPS forecast. Retrieved from https://www.investing.com/news/transcripts/earnings-call-transcript-mfa-financial-q2-2025-misses-eps-forecast-93CH-4174057