TPG RE Finance Trust (NYSE:TRTX) and Angel Oak Mortgage REIT (NYSE:AOMR) Head-To-Head Comparison

Angel Oak Mortgage REIT (NYSE:AOMR) and TPG RE Finance Trust (NYSE:TRTX) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Earnings & Valuation

This table compares Angel Oak Mortgage REIT and TPG RE Finance Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Angel Oak Mortgage REIT	$10.87 million	13.21	$44.02 million	($0.43)	-14.39
TPG RE Finance Trust	$332.58 million	1.60	$60.32 million	$0.39	18.04

TPG RE Finance Trust has higher revenue and earnings than Angel Oak Mortgage REIT. Angel Oak Mortgage REIT is trading at a lower price-to-earnings ratio than TPG RE Finance Trust, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Angel Oak Mortgage REIT has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, TPG RE Finance Trust has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500.

Profitability

This table compares Angel Oak Mortgage REIT and TPG RE Finance Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Angel Oak Mortgage REIT	-5.74%	10.12%	0.90%
TPG RE Finance Trust	13.13%	5.21%	1.17%

Analyst Recommendations

This is a summary of current ratings and target prices for Angel Oak Mortgage REIT and TPG RE Finance Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Angel Oak Mortgage REIT	1	1	4	0	2.50
TPG RE Finance Trust	1	2	4	0	2.43

Angel Oak Mortgage REIT currently has a consensus target price of $9.25, suggesting a potential upside of 49.48%. TPG RE Finance Trust has a consensus target price of $9.33, suggesting a potential upside of 32.69%. Given Angel Oak Mortgage REIT’s stronger consensus rating and higher probable upside, equities analysts clearly believe Angel Oak Mortgage REIT is more favorable than TPG RE Finance Trust.

Institutional and Insider Ownership

80.2% of Angel Oak Mortgage REIT shares are held by institutional investors. Comparatively, 57.1% of TPG RE Finance Trust shares are held by institutional investors. 2.9% of Angel Oak Mortgage REIT shares are held by company insiders. Comparatively, 3.0% of TPG RE Finance Trust shares are held by company 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.

Dividends

Angel Oak Mortgage REIT pays an annual dividend of $1.28 per share and has a dividend yield of 20.7%. TPG RE Finance Trust pays an annual dividend of $0.96 per share and has a dividend yield of 13.6%. Angel Oak Mortgage REIT pays out -297.7% of its earnings in the form of a dividend. TPG RE Finance Trust pays out 246.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Angel Oak Mortgage REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

TPG RE Finance Trust beats Angel Oak Mortgage REIT on 8 of the 15 factors compared between the two stocks.

About Angel Oak Mortgage REIT

Angel Oak Mortgage REIT, Inc., a real estate finance company, focuses on acquiring and investing in first lien non- qualified mortgage loans and other mortgage-related assets in the United States mortgage market. It offers investment securities; residential mortgage loans; and commercial mortgage loans. 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 incorporated in 2018 and is headquartered in Atlanta, Georgia.

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.