Comparing TPG RE Finance Trust (NYSE:TRTX) and Franklin BSP Realty Trust (NYSE:FBRT)

TPG RE Finance Trust (NYSE:TRTX) and Franklin BSP Realty Trust (NYSE:FBRT) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, profitability, institutional ownership and valuation.

Risk & Volatility

TPG RE Finance Trust has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500. Comparatively, Franklin BSP Realty Trust has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500.

Valuation and Earnings

This table compares TPG RE Finance Trust and Franklin BSP Realty Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TPG RE Finance Trust	$332.58 million	1.46	$60.32 million	$0.54	11.71
Franklin BSP Realty Trust	$270.07 million	1.96	$82.27 million	$0.44	14.47

Franklin BSP Realty Trust has lower revenue, but higher earnings than TPG RE Finance Trust. TPG RE Finance 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.

Analyst Ratings

This is a summary of recent recommendations and price targets for TPG RE Finance Trust and Franklin BSP Realty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TPG RE Finance Trust	0	3	4	0	2.57
Franklin BSP Realty Trust	1	2	3	0	2.33

TPG RE Finance Trust currently has a consensus price target of $10.00, indicating a potential upside of 58.10%. Franklin BSP Realty Trust has a consensus price target of $11.00, indicating a potential upside of 72.82%. Given Franklin BSP Realty Trust’s higher possible upside, analysts plainly believe Franklin BSP Realty Trust is more favorable than TPG RE Finance Trust.

Profitability

This table compares TPG RE Finance Trust and Franklin BSP Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TPG RE Finance Trust	17.03%	6.85%	1.66%
Franklin BSP Realty Trust	20.49%	5.82%	1.17%

Institutional and Insider Ownership

57.1% of TPG RE Finance Trust shares are owned by institutional investors. Comparatively, 59.9% of Franklin BSP Realty Trust shares are owned by institutional investors. 3.0% of TPG RE Finance Trust shares are owned by company insiders. Comparatively, 1.3% of Franklin BSP Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

TPG RE Finance Trust pays an annual dividend of $0.96 per share and has a dividend yield of 15.2%. Franklin BSP Realty Trust pays an annual dividend of $0.80 per share and has a dividend yield of 12.6%. TPG RE Finance Trust pays out 177.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Franklin BSP Realty Trust pays out 181.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TPG RE Finance Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

TPG RE Finance Trust beats Franklin BSP Realty Trust on 10 of the 16 factors compared between the two stocks.

About TPG RE Finance Trust

TPG RE Finance Trust, Inc., a commercial real estate finance company, originates, acquires, and manages commercial mortgage loans and other commercial real estate-related debt instruments in the United States. It invests in commercial mortgage loans; subordinate mortgage interests, mezzanine loans, secured real estate securities, note financing, preferred equity, and miscellaneous debt instruments; and commercial real estate collateralized loan obligations and commercial mortgage-backed securities secured by properties primarily in the multifamily, life science, mixed-use, hospitality, self storage, industrial, and retail real estate sectors. 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. TPG RE Finance Trust, Inc. was incorporated in 2014 and is based 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.