United Wholesale Mortgage as an investment

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I’ll open a thread as UWMC doesn’t seem very expensive at the moment, even though interest rate hikes are starting in the US in 2022, which could affect loan volumes and especially loan refinancing (it’s difficult to compete for a cheaper loan if interest rates rise).

United Wholesale Mortgage is a loan broker in the so-called wholesale channel.
UWM has been growing well in terms of revenue, and according to the company, its speed and cost level are low in the industry, and the company emphasizes new technologies to improve its performance. For example, through Voxtur, familiar from the forum, they adopted a direct connection to Appraisals in the form of Appraisal Direct.

Currently, the P/E ratio, according to Marketwatch, looks like 9.99 for 2021, and the dividend is over 7%.
The company has paid a dividend of $0.1 for 4 consecutive quarters, and the company’s closing price on 20.1.2022 was around 5.35.
The dividend yield could potentially be $0.4 / year thus.

I see it as likely that UWM will continue to be a relative winner and will be able to price competitively and be faster than its competitors in loan processing. However, the market may face headwinds generally as interest rates rise.

However, the company does not seem particularly expensive at the moment. Somehow it feels that interest rates cannot be raised too much, and perhaps people may find it timely to change homes now that eviction protections and other measures have ended in the US. I cannot say how significant that could be for the overall picture.

I plan to update the company’s results and news here, and I will follow the company anyway as an affiliate of Voxtur.

According to the company, their average loan processing time is 19 days (from memory, please check), and in the industry, it was apparently 43 days… According to them, this should improve through BOLT and Appraisal Direct in the future.

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Interest rates are, of course, a risk and sometimes an opportunity; target prices can be found there (too).
It is quite interesting, even because of its dividend policy; I need to research it a bit more. Have you been following this for a long time already?

https://www.marketscreener.com/quote/stock/UWM-HOLDINGS-CORPORATION-118077264/consensus/

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I could be more informed, I have been following Voxtur since they acquired UWM as a client.
The company looks quite solid. The market is expected to become more difficult.

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"UWM will host a conference call for financial analysts and investors on Tuesday, March 1, 2022, at 10:00 AM ET to review the results and answer questions.

A press release with financial highlights will be available on the company’s investor relations website [https://investors.uwm.com]"

P/E < 7, dividend yield 9%. A small addition seems appropriate before Q4 results, and if the outlook is good and the dividend holds, I might consider this on a larger scale. Not a recommendation. I am not aware of any potential risks to dividend payment capability in the longer term.

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The main thing is probably the refinancing and possible decrease in volumes. On the risk side.

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Q4 ended in a loss, but in a super tough market, the loss was due to valuation changes.

The $0.4/year dividend will likely remain.

Second consecutive quarter as #1 in the US and gained market share.

According to the CEO, they are the best and can set the price level in the market, as they are the most efficient.

It moved up to #2 in my portfolio.

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Good quarter, others are cutting while UWMC is strengthening relatively and is ready for higher volume when the time comes, operationally profitable and pays a dividend that looks sustainable

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I’m bumping uwmc threads up, in case someone notices this; Rocket Companies is already a very good and active thread.

Yesterday, uwmc had a good quarter and plans to raise its margins next quarter. The US housing market might now be turning more active.

So now might be a good time to listen to the last few quarterly calls and get to know the company.

I personally made this my largest holding for a moment yesterday, and when the best rise tapered off, it became my 2nd largest position.

While waiting, one gets $0.1 quarterly, which is $0.4 annually. At the current share price, that’s almost 9%.

Quite okay while waiting, and if things go well, one doesn’t have to wait long. As soon as US market interest rates drop a bit, profit and money will start flowing into the results.

We hope that inflation doesn’t hit too badly.

Fed, please just bring interest rates into a downward financial trend, thank you.

Oh, by the way, AI is already working and actively used at uwmc. The company promises that it can double its revenue with the same costs if interest rates fall! The next quarter should also be quite good.

Some costs are rising in 2025 because servicing is being brought in-house; this will ease in 2026.