Rithm Capital prices $190 million preferred stock offering

Rithm Capital Corp. (RITM) has priced an underwritten public offering of 7.6 million shares of its 8.75% Series E Fixed-Rate Cumulative Redeemable Preferred Stock at $25.00 per share, aiming to raise approximately $190 million for investments and general corporate purposes. This capital infusion supports the $6.5 billion alternative asset manager's strategic expansion, which recently included the $1.6 billion acquisition of Paramount Group and the integration of Crestline Management with $17 billion in assets under management, reinforcing its growth trajectory and consistent 8.14% dividend yield.

Analysis

Rithm Capital (RITM) is executing a multi-faceted strategic expansion, reinforced by a new capital infusion from a public offering of 8.75% Series E preferred stock expected to generate approximately $190 million in gross proceeds. The proceeds, designated for investments and general corporate purposes, will likely support the company's aggressive M&A activity, which includes the recent definitive agreements to acquire Paramount Group for approximately $1.6 billion and Crestline Management with its ~$17 billion in AUM. This expansionary posture is supported by strong underlying fundamentals, including 16.59% revenue growth over the last twelve months and an attractive P/E ratio of 9.45. The company's commitment to shareholder returns remains a core attribute, evidenced by a sustained 8.14% dividend yield on its common stock for 13 consecutive years. Furthermore, the recent resolution of stockholder litigation removes a potential governance overhang, while the participation of a strong syndicate of leading investment banks as underwriters lends institutional credibility to the offering and the company's financial health.

Key Decisions for Investors

• Investors should view the capital raise as a direct enabler of Rithm's aggressive M&A strategy, focusing on the successful integration of the Paramount and Crestline acquisitions as a key catalyst for future stock performance.
• Income-focused investors should evaluate the newly issued 8.75% Series E preferred stock (RITM PR E) as a distinct high-yield opportunity, separate from the common stock's already substantial 8.14% dividend yield.
• Given the stock is trading near its 52-week high, investors should monitor the execution and integration risks associated with the recent large-scale acquisitions, as this will be critical to justifying the company's growth trajectory and attractive 9.45 P/E multiple.