Walker & Dunlop continues to reward its shareholders with a dependable dividend, even as major institutional investors demonstrate sharply divided sentiment. The company’s latest quarterly results amplify this dichotomy, revealing a landscape of impressive revenue expansion set against a backdrop of underwhelming profit guidance.
Robust Dividend Profile Maintains Investor Appeal
Shareholders are set to receive a quarterly cash dividend of $0.67 per share. This payment will be distributed on September 5th to all investors of record as of August 21st. On an annualized basis, the dividend totals $2.68 per share, which equates to a current yield of 3.2%. The company maintains a significant payout ratio of 82.72%, underscoring its steadfast commitment to returning value to its equity holders.
Major Investors Chart Divergent Paths
The institutional ownership landscape experienced notable shifts in the most recent quarter, revealing a clear lack of consensus among major funds.
On one side, several established investors scaled back their exposure. The Swiss National Bank decreased its stake by 1.5%, leaving it with a holding of 65,400 shares. Similarly, Vanguard Group Inc. reduced its position by 1.9%, bringing its total down to 3,702,174 shares.
Conversely, other institutions made significant bullish bets. Royce & Associates LP executed the most dramatic move, expanding its investment by a remarkable 257.2% to hold 282,688 shares. Northern Trust Corp increased its stake by 26,461 shares for a new total of 437,665. Janus Henderson Group PLC grew its position by a more modest 0.5%, reaching 1,845,100 shares. Perhaps most notably, Sequoia Financial Advisors LLC established a completely new position, acquiring shares valued at $22.3 million. Collectively, institutions control 80.97% of the outstanding shares, signaling sustained high-level interest despite the starkly contrasting strategies being deployed.
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Second Quarter Performance: A Mixed Bag
The company’s Q2 earnings report presented a complex picture of strengths and challenges.
While earnings per share (EPS) of $1.15 fell short of the $1.29 analysts had projected, revenue told a different story. The top line surged to $319.24 million, not only surpassing consensus estimates by over 15% but also representing a robust year-over-year increase of 17.9%.
Key operational highlights from the quarter included:
- Transaction Volume: Skyrocketed by 65% to $14.0 billion
- Net Income: Climbed 50% to $34.0 million
- Diluted Earnings Per Share: Advanced 48% to $0.99
However, these strong headline figures masked some underlying softness. Adjusted EBITDA contracted by 5% to $76.8 million, while the adjusted core earnings per share declined by 7% to $1.15. The core multifamily business unit performed exceptionally well, achieving record absorption rates amid a slowdown in new construction projects. Government-Sponsored Enterprise (GSE) loan volume hit $4.9 billion, and total loan servicing volume grew by 64%. The provision for credit losses was a primary factor that weighed on the company’s adjusted financial metrics.
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