The Company in a Nutshell
- WD generates majority of total revenue from gains from mortgage banking activities and servicing fees.
- It conducts business solely in the United States.
- The company started paying dividend in 2018.
- We do not cover Walker & Dunlop at the moment.
Date Reviewed | N/A |
Company Name | Walker & Dunlop Inc |
Symbol | WD |
Sector | Financials |
Industry | Mortgage Finance |
Beta | 1.539 |
PRO Rating | 3 |
Dividend Safety | 4 |
Business Model
Walker & Dunlop, Inc. is a commercial real estate finance and advisory services firm. The Company focuses on providing multifamily lending, property sales, commercial real estate debt brokerage, and housing investment management. Its segments include Capital Markets, Servicing & Asset Management, and Corporate. Capital Markets segment provides a range of commercial real estate finance products to customers, including Agency lending, property sales, and appraisal and valuation services, others. Servicing & Asset Management segment's activities include servicing and asset-managing the portfolio of loans the Company- originates and sells to the Agencies; or brokers to certain life insurance companies, and originates through its principal lending and investing activities, and managing third-party capital invested in tax credit equity funds focused on the housing sector, and other commercial real estate. Corporate segment includes treasury operations, and other corporate-level activities.
Current price | 112.61 |
ROE | 6.15 % |
ROIC | 0.00 % |
Shareholder Yield | 0.25 % |
5-Yr Total Return | 124.55 % |
1-Yr Total Return | 53.60 % |
Next Earnings Date | 11-07-24 |
Latest Quarter Information
What the CEO said:
The second quarter of 2024 was the first quarter in almost two years with consistent rates and the ability for commercial real estate owners to transact, pushing Walker & Dunlop's total transaction volume up 32% from Q1'24 to $8.4 billion. Increased transaction volumes, combined with our durable, recurring revenue streams from servicing and asset management, generated 3% growth in adjusted core EPS and 9% growth in adjusted EBITDA from the first quarter, evident of the momentum building in the market. It is clear that rate stability and the need to deploy, and recycle, capital is driving increased transaction volumes from owners of commercial real estate.
What we say:
09-06-2024, WLKP's Q2 net income declined by 18% Y/Y, AEBITDA, however, increased by 15% driven by recurring revenue streams and recovery in transaction volumes. It generated 3% growth in adjusted core EPS and 9% growth in adjusted EBITDA QoQ. The company's Servicing portfolio of $132.8B was up 5% YoY. During Q2, WLKP added $0.8B of net loans to its servicing portfolio, and MSRs associated with its servicing portfolio had a fair value of $1.4B. AUM was ~$17.6B comprising majorly $15.2B of LIHTC funds. About $11B of agency loans in WLKP's portfolio are slated to mature in the next two years. WLKP closed $8.4B of total transaction volume in the quarter, flat from Q2 of 2023.
Investment Thesis
Dividend Triangle
5-Yr Rev. Growth | 7.75 % |
5-Yr EPS Growth | -8.50 % |
5-Yr Div Growth | 20.30 % |
Potential Risks
Debt/Equity | 0.80 |
Financial Debt to EBITDA (TTM) | 3.90 |
Current Ratio (Quarterly) | 0.00 |
Credit Score | 23 |
Dividend Growth Perspective
Dividend ($) | 2.6 |
Dividend Yield Fwd | 2.30 % |
Dividend Frequency | Quarterly |
Average 5-Yr Yield | 2.05 % |
Payout Ratio (%) | 81.10 |
Cash Payout Ratio (%) | 13.00 |
DGR 1-Yr | 3.15 |
DGR 3-Yr | 20.50 |
DGR 5-Yr | 20.30 |
DGR Streak | |
Chowder Score | 22.60 |
Next DVD PMT | 09-06-24 |
Valuation
Recent Annual Dividend Payment | $ 2.00 |
Expected Dividend Growth Rate Years 1-10 | 7.00% |
Expected Terminal Dividend Growth Rate | 6.00% |
Discount Rate | 9.00% |
Discount Rate (Horizontal) | |||
Margin of Safety | 8.00% | 9.00% | 10.00% |
20% Premium | $ 138.71 | $ 92.17 | $ 68.91 |
10% Premium | $ 127.15 | $ 84.49 | $ 63.17 |
Intrinsic Value | $ 115.59 | $ 76.81 | $ 57.43 |
10% Discount | $ 104.03 | $ 69.13 | $ 51.69 |
20% Discount | $ 92.47 | $ 61.45 | $ 45.94 |
Video Tutorial: How to Read the Stock Cards DDM Valuation
Market Cap | 4 B |
PE Ratio | 43.50 |
Fwd PE | 26.20 |
Price to Book Ratio | 2.20 |
DDM Valuation | N/A |
Average 5-Yr PE | 16.35 |
Value Score | 40 |
- All financial metrics are updated weekly.
- The DSR PRO rating and Dividend Safety Score are updated quarterly.
- The analysis (investment thesis, risk potential, dividend growth perspective and DDM calculation) is reviewed every 6 months.
- The PDF format includes only comments (no metrics) and is reviewed every 6 months.