New York Mortgage Trust (NASDAQ: NYMT) and Granite Point Mortgage Trust (NYSE:GPMT) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.

Dividends

New York Mortgage Trust pays an annual dividend of $0.80 per share and has a dividend yield of 12.5%. Granite Point Mortgage Trust pays an annual dividend of $0.32 per share and has a dividend yield of 1.8%. New York Mortgage Trust pays out 148.2% 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 pays out 35.2% of its earnings in the form of a dividend.

Institutional and Insider Ownership

37.8% of New York Mortgage Trust shares are held by institutional investors. Comparatively, 13.5% of Granite Point Mortgage Trust shares are held by institutional investors. 1.3% of New York Mortgage Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and target prices for New York Mortgage Trust and Granite Point Mortgage Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New York Mortgage Trust 0 4 1 0 2.20
Granite Point Mortgage Trust 0 2 3 0 2.60

New York Mortgage Trust currently has a consensus price target of $6.19, indicating a potential downside of 3.17%. Granite Point Mortgage Trust has a consensus price target of $19.50, indicating a potential upside of 8.57%. Given Granite Point Mortgage Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Granite Point Mortgage Trust is more favorable than New York Mortgage Trust.

Valuation and Earnings

This table compares New York Mortgage Trust and Granite Point Mortgage Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New York Mortgage Trust $319.31 million 2.24 $67.55 million $0.54 11.83
Granite Point Mortgage Trust N/A N/A N/A $0.91 19.74

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

Profitability

This table compares New York Mortgage Trust and Granite Point Mortgage Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New York Mortgage Trust 20.23% 10.78% 0.74%
Granite Point Mortgage Trust N/A N/A N/A

Summary

New York Mortgage Trust beats Granite Point Mortgage Trust on 7 of the 12 factors compared between the two stocks.

New York Mortgage Trust Company Profile

New York Mortgage Trust, Inc. is a real estate investment trust (REIT). The Company is engaged in the business of acquiring, investing in, financing and managing primarily mortgage-related assets and financial assets. The Company’s investment portfolio includes residential mortgage loans, including second mortgages and loans sourced from distressed markets, non-agency residential mortgage-backed securities (RMBS), multi-family commercial mortgage-backed securities, preferred equity and joint venture equity investments in, and mezzanine loans to, owners of multi-family properties, equity and debt securities issued by entities that invest in residential and commercial real estate and agency RMBS. It may acquire and manage various other types of mortgage-related and financial assets, including, without limitation, collateralized mortgage obligations and securities issued by newly originated residential securitizations, including credit sensitive securities from these securitizations.

Granite Point Mortgage Trust Company Profile

Granite Point Mortgage Trust Inc. is focused primarily on directly originating, investing in and managing senior floating-rate commercial mortgage loans and other debt, such as commercial real estate investments. The Company formed to continue and expand the commercial real estate lending business. The Company is a long-term, fundamental value-oriented investor. The Company constructs its own investment portfolio on a loan-by-loan basis, emphasizing rigorous credit underwriting, selectivity and diversification available in the market. The Company provides intermediate-term bridge or transitional financing for a variety of purposes, including acquisitions, recapitalizations, refinancing and a range of business plans including lease-up, renovation, repositioning and repurposing of the property. It generally targets the top 25-50, metropolitan statistical areas (MSA) in the United States.

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