Pontiac, Michigan-based United Wholesale Mortgage, a wholesale mortgage lender, completed its merger with special purpose acquisition company Gores Holdings IV. Shares of United Wholesale Mortgage began trading on the New York Stock Exchange under the ticker symbol "UWMC" on Friday, January 22, 2021. The stock opened at $11.43 per share.
The merger values the newly combined company, which will now be called UMW Holdings Corporation, at $16 billion.
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| Latest market close | $5.09 |
|---|---|
| 52-week range | $2.67 - $6.98 |
| 50-day moving average | $5.97 |
| 200-day moving average | $5.02 |
| Wall St. target price | $6.03 |
| PE ratio | 81.7857 |
| Dividend yield | $0.4 (6.79%) |
| Earnings per share (TTM) | $0.07 |
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United Wholesale Mortgages (UWMC) is a mortgage lending service.
The company provides wholesale lending and underwrites closing documentation for residential mortgage loans aimed at independent mortgage brokers, small banks and local credit unions.
Operating out of Detroit, the business states its technology allows for faster, easier and cheaper mortgage processes.
Having somewhere to live is a basic human need, but most people cannot secure a home without a home loan.
One of the leaders in the wholesale mortgage sector is UWMC. It is one of the largest wholesale mortgage providers in America, and it has a continued projection of growth.
UWMC has an extensive track record of creating value and is in a growing sector.
Prior to the global financial crisis between 2007 and 2009, wholesale lending made up about half of all mortgages, and in recent times, it has been making a comeback.
United Wholesale Mortgages has the strategic advantage of being the largest wholesale lender six years in a row.
It has invested heavily in its technology and client services. As such, it can now underwrite and provide closing documentation for residential mortgages cheaply and more efficiently.
While affordability issues in the housing sector remain a key risk facing the industry, UWMC is in a solid financial position to navigate this risk.
In the current market environment, the company has two main risk factors it needs to navigate:
Spurred on by reopening and large government stimulus packages, the United States’ economy has bounced back in a relatively short period of time.
However, the recovery is not without its issues, one being the potential for inflation. Inflationary pressures could force the Federal Reserve to raise interest rates.
While rising rates could help a wholesaler with its margins on loans, it could also put pressure on the housing market as a whole. And this could reduce the demand for United Wholesale’s services.
Similarly, house prices in the US have already jumped by as much as 27% depending on the location. This is putting pressure on the housing market.
If the housing market softens due to a lack of affordability, it could put pressure on United Wholesale Mortgage’s bottom line.
The key risks vary depending on your view of the property market.
If you believe the market could fall then a mortgage provider could be a risk.
However, if you believe the housing market will continue to grow or if you think the Fed will continue its “lower for longer” approach, these key risks could be avoided.
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This chart is not advice or a guarantee of success. Rather, it gauges the real-time recommendations of three popular technical indicators: moving averages, oscillators and pivots. Finder is not responsible for how your stock performs.
This all depends on your views on the housing market and the Federal Reserve.
If you believe the property market will continue its strong growth and rates will remain low for longer, then a stock like UWMC could remain attractive for investors.
However, if you believe the housing market could soften, it could have a negative impact on United Wholesale Mortgage.
But it’s important to note that UWMC’s stock is down 57% year-to-date.
This means bullish investors can get in relatively cheap compared with the start of the year. An investor today could purchase 181 shares today compared with 77 at the start of the year.
$1,000 today into the stock relatively cheaply.
Historical closes compared with the close of $5.09 from 2023-09-20
| 1 week (2023-09-15) | -5.74% |
|---|---|
| 1 month (2023-08-22) | -8.45% |
| 3 months (2023-06-22) | -11.17% |
| 6 months (2023-03-20) | 14.64% |
| 1 year (2022-09-22) | 45.85% |
|---|---|
| 2 years (2021-09-22) | -26.23% |
| 3 years (2020-09-22) | 10.4156 |
| 5 years (2018-09-18) | N/A |
Valuing UWM stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of UWM's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
To put UWM's EBITDA into context you can compare it against that of similar companies.
| Revenue TTM | $2 billion |
|---|---|
| Operating margin TTM | 35.39% |
| Gross profit TTM | $2.1 billion |
| Return on assets TTM | 3.7% |
| Return on equity TTM | 11.45% |
| Profit margin | 0.36% |
| Book value | $1.31 |
| Market Capitalization | $17.7 billion |
TTM: trailing 12 months
Dividend payout ratio: 2.35% of net profits
Recently UWM has paid out, on average, around 2.35% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 6.79% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), UWM shareholders could enjoy a 6.79% return on their shares, in the form of dividend payments. In UWM's case, that would currently equate to about $0.4 per share.
While UWM's payout ratio might seem low, this can signify that UWM is investing more in its future growth.
UWM's most recent dividend payout was on 10 October 2023. The latest dividend was paid out to all shareholders who bought their shares by 18 September 2023 (the "ex-dividend date").
UWM's dividend payout ratio is perhaps best considered in relation to those of similar companies.
Over the last 12 months, UWM's shares have ranged in value from as little as $2.6716 up to $6.98. A popular way to gauge a stock's volatility is its "beta".
Beta is a measure of a share's volatility in relation to the market. The market (NYSE average) beta is 1, while UWM's is 1.5614. This would suggest that UWM's shares are more volatile than the average for this exchange and represent, relatively-speaking, a higher risk (but potentially also market-beating returns).
To put UWM's beta into context you can compare it against those of similar companies.
UWM Holdings Corporation engages in the residential mortgage lending business in the United States. The company originates mortgage loans through wholesale channel. It originates primarily conforming and government loans. UWM Holdings Corporation was founded in 1986 and is headquartered in Pontiac, Michigan. .
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