What’s Driving UWM Holdings Corporation (UWMC) Stock Action

UWM Holdings Corporation (NYSE:UWMC) is among the hidden penny stocks to invest in. According to a June 5 report by TheFly, Keefe Bruyette said UWM Holdings Corporation (NYSE:UWMC) shares reached an all-time low the day before, significantly underperforming its mortgage banking competitors over the past month. The analyst attributed this to worries around the company’s leverage in a “higher-for-longer” mortgage rate landscape.

While maintaining its Market Perform rating and a price target of $4.50, Keefe noted that a major driver of UWM’s weaker leverage is its dividend. Additionally, the firm asserted that the Two Harbors acquisition “no longer appears compelling if it’s largely for cash,” and once this is resolved, a dividend cut is likely. As stated by the firm,

“Despite potential initial share weakness on a dividend cut, we think it is likely to be a meaningful, longer-term positive for capital and valuation.”

A technical stock market chart. Photo by Energepic from Pexels

Back on May 15, Keefe, Bruyette & Woods reaffirmed its stance on UWM Holdings Corporation (NYSE:UWMC) with a Market Perform rating and a $4.50 price target. This comes after the company’s investor day, in which management indicated that the broker channel’s share could grow from the current 28% to more than 50%. The growth opportunity arising from this, in addition to other tailwinds, makes UWMC one of the hidden penny stocks to invest in.

UWM Holdings Corporation (NYSE:UWMC) is a Michigan-based company specializing in origination, sale, and servicing residential mortgage lending. Founded in 1986, the company originates primarily from conforming and government loans.

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