03:25 PM EDT, 03/15/2024 (MT Newswires) -- Granite Point Mortgage Trust's ( GPMT ) dividend cut reflects "the near-to-intermediate term drag on earnings power from the increased level of non-accrual assets," UBS Securities said in a report emailed Friday.
Granite Point on Thursday cut its quarterly common-stock dividend to $0.15 a share from $0.20.
"Management expects near-term earnings (before realized losses) to be below the new dividend until there is progress on resolution of the problem assets," UBS said.
Granite Point has no corporate debt maturities and holds $170 million in unrestricted cash, ensuring a solid liquidity position, UBS said. The dividend cut will save $2.5 million a quarter in cash flow, and "with shares trading at 36% of trailing book value, we would like to see the company use some or all of the cash savings to repurchase shares," the report said.
UBS has a buy rating on Granite Point with a 12-month price target of $6.50.
Granite Point shares rose 0.6% in recent Friday trading.
Price: 4.74, Change: +0.03, Percent Change: +0.64