Granite Point Mortgage Trust (NYSE:GPMT) and Franklin BSP Realty Trust (NYSE:FBRT) Head-To-Head Analysis

Granite Point Mortgage Trust (NYSE:GPMT) and Franklin BSP Realty Trust (NYSE:FBRT) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, dividends, risk, profitability and institutional ownership.

Dividends

Granite Point Mortgage Trust pays an annual dividend of $0.20 per share and has a dividend yield of 14.3%. Franklin BSP Realty Trust pays an annual dividend of $0.80 per share and has a dividend yield of 9.2%. Granite Point Mortgage Trust pays out -18.7% of its earnings in the form of a dividend. Franklin BSP Realty Trust pays out 156.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Granite Point Mortgage Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings for Granite Point Mortgage Trust and Franklin BSP Realty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Granite Point Mortgage Trust	1	2	1	0	2.00
Franklin BSP Realty Trust	2	0	3	0	2.20

Granite Point Mortgage Trust presently has a consensus target price of $2.50, indicating a potential upside of 79.21%. Franklin BSP Realty Trust has a consensus target price of $11.50, indicating a potential upside of 32.11%. Given Granite Point Mortgage Trust’s higher possible upside, research analysts clearly believe Granite Point Mortgage Trust is more favorable than Franklin BSP Realty Trust.

Volatility and Risk

Granite Point Mortgage Trust has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500. Comparatively, Franklin BSP Realty Trust has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.

Valuation and Earnings

This table compares Granite Point Mortgage Trust and Franklin BSP Realty Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Granite Point Mortgage Trust	$131.73 million	0.51	-$41.15 million	($1.07)	-1.30
Franklin BSP Realty Trust	$270.07 million	2.48	$82.27 million	$0.51	17.07

Franklin BSP Realty Trust has higher revenue and earnings than Granite Point Mortgage Trust. Granite Point Mortgage Trust is trading at a lower price-to-earnings ratio than Franklin BSP Realty Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Granite Point Mortgage Trust and Franklin BSP Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Granite Point Mortgage Trust	-29.82%	-11.31%	-3.65%
Franklin BSP Realty Trust	24.26%	6.46%	1.34%

Insider & Institutional Ownership

51.6% of Granite Point Mortgage Trust shares are held by institutional investors. Comparatively, 59.9% of Franklin BSP Realty Trust shares are held by institutional investors. 3.1% of Granite Point Mortgage Trust shares are held by company insiders. Comparatively, 1.3% of Franklin BSP Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Franklin BSP Realty Trust beats Granite Point Mortgage Trust on 11 of the 16 factors compared between the two stocks.

About Granite Point Mortgage Trust

Granite Point Mortgage Trust Inc., a real estate investment trust, originates, invests in, and manages senior floating-rate commercial mortgage loans, and other debt and debt-like commercial real estate investments in the United States. The company provides intermediate-term bridge or transitional financing for various purposes, including acquisitions, recapitalizations, and refinancing, as well as a range of business plans, including lease-up, renovation, repositioning, and repurposing of the commercial property. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2015 and is headquartered in New York, New York.

About Franklin BSP Realty Trust

Benefit Street Partners operates as a self-managed real estate investment trust (REIT). BSP earns income from investing in a leveraged portfolio of residential mortgage pass-through securities consisting almost exclusively of adjustable-rate mortgage (ARM) securities issued and guaranteed by government-sponsored enterprises, either Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac) (together, the government-sponsored enterprises (GSEs)), or by an agency of the federal government, Government National Mortgage Association (Ginnie Mae). BSP’s investment strategy focuses on managing a portfolio of residential mortgage investments consisting almost exclusively of ARM Agency Securities. As of December 31, 2012, the Company’s securities consisted of Agency Securities classified as available-for-sale and Residential mortgage securities classified as held-to-maturity.