Comparing Granite Point Mortgage Trust (NYSE:GPMT) and Franklin BSP Realty Trust (NYSE:FBRT)

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

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%

Dividends

Granite Point Mortgage Trust pays an annual dividend of $0.20 per share and has a dividend yield of 14.5%. Franklin BSP Realty Trust pays an annual dividend of $0.80 per share and has a dividend yield of 9.4%. 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.

Volatility & 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.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Granite Point Mortgage Trust and Franklin BSP Realty Trust, as reported 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 currently has a consensus target price of $2.50, indicating a potential upside of 81.16%. Franklin BSP Realty Trust has a consensus target price of $11.50, indicating a potential upside of 35.37%. Given Granite Point Mortgage Trust’s higher possible upside, analysts plainly believe Granite Point Mortgage Trust is more favorable than Franklin BSP Realty Trust.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Granite Point Mortgage Trust	$131.73 million	0.50	-$41.15 million	($1.07)	-1.29
Franklin BSP Realty Trust	$498.69 million	1.31	$82.27 million	$0.51	16.66

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.

Insider and Institutional Ownership

51.6% of Granite Point Mortgage Trust shares are owned by institutional investors. Comparatively, 59.9% of Franklin BSP Realty Trust shares are owned by institutional investors. 3.1% of Granite Point Mortgage Trust shares are owned by insiders. Comparatively, 1.3% of Franklin BSP Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock 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.