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

Analyst Recommendations

This is a summary of current ratings and target prices for TPG RE Finance Trust and PHH Corp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TPG RE Finance Trust 0 2 3 0 2.60
PHH Corp 0 2 1 0 2.33

TPG RE Finance Trust currently has a consensus target price of $21.20, suggesting a potential upside of 5.42%. PHH Corp has a consensus target price of $15.83, suggesting a potential upside of 12.21%. Given PHH Corp’s higher possible upside, analysts plainly believe PHH Corp is more favorable than TPG RE Finance Trust.

Institutional and Insider Ownership

97.4% of PHH Corp shares are held by institutional investors. 2.5% of PHH Corp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares TPG RE Finance Trust and PHH Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TPG RE Finance Trust 48.73% 10.27% 3.73%
PHH Corp -55.15% -20.67% -7.37%

Valuation & Earnings

This table compares TPG RE Finance Trust and PHH Corp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TPG RE Finance Trust N/A N/A N/A N/A N/A
PHH Corp $734.00 million 0.99 -$261.66 million ($5.10) -2.77

TPG RE Finance Trust has higher revenue, but lower earnings than PHH Corp.

Summary

TPG RE Finance Trust beats PHH Corp on 5 of the 9 factors compared between the two stocks.

TPG RE Finance Trust Company Profile

TPG RE Finance Trust, Inc. is a commercial real estate finance company. The Company is engaged in originating, acquiring and managing commercial mortgage loans and other commercial real estate-related debt instruments. It focuses primarily on directly originating and selectively acquiring floating rate first mortgage loans that are secured by high quality commercial real estate properties undergoing some form of transition and value creation, such as re-tenanting, refurbishment or other form of repositioning. As of December 31, 2016, the Company’s portfolio consisted of 54 first mortgage loans. As of December 31, 2016, 97% of the loan commitments in its portfolio consisted of floating rate loans, and 98.6% of the loan commitments in its portfolio consisted of first mortgage loans.

PHH Corp Company Profile

PHH Corporation is a standalone mortgage company. The Company provides outsourced mortgage banking services to a range of clients, including financial institutions and real estate brokers throughout the United States, and is focused on originating, selling, servicing and subservicing residential mortgage loans through its subsidiary, PHH Mortgage Corporation and its subsidiaries. It operates through two segments: Mortgage Production and Mortgage Servicing. The Mortgage Production segment provides mortgage loan origination services and sells mortgage loans. The Mortgage Servicing segment performs servicing activities for loans originated by the Company and mortgage servicing rights purchased from others, and acts as a subservicer for certain clients that own the underlying mortgage servicing rights. The Mortgage Production segment provides private label mortgage services to financial institutions and real estate brokers, and sources mortgage loans through its retail platform.

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