Orchid Island Capital (NYSE: ORC) and Granite Point Mortgage Trust (NASDAQ:GPMT) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitability, risk and institutional ownership.

Dividends

Orchid Island Capital pays an annual dividend of $1.68 per share and has a dividend yield of 17.0%. Granite Point Mortgage Trust does not pay a dividend. Orchid Island Capital pays out -2,799.5% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent recommendations for Orchid Island Capital and Granite Point Mortgage Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orchid Island Capital 0 1 0 0 2.00
Granite Point Mortgage Trust 0 2 2 0 2.50

Granite Point Mortgage Trust has a consensus target price of $20.00, suggesting a potential upside of 10.31%. Given Granite Point Mortgage Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Granite Point Mortgage Trust is more favorable than Orchid Island Capital.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Orchid Island Capital $2.97 million 151.16 -$2.72 million ($0.06) -165.14
Granite Point Mortgage Trust N/A N/A N/A N/A N/A

Granite Point Mortgage Trust has higher revenue, but lower earnings than Orchid Island Capital.

Profitability

This table compares Orchid Island Capital and Granite Point Mortgage Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orchid Island Capital N/A -3.33% -0.35%
Granite Point Mortgage Trust 54.39% 8.94% 3.09%

Institutional & Insider Ownership

23.6% of Orchid Island Capital shares are owned by institutional investors. 0.9% of Orchid Island Capital shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Granite Point Mortgage Trust beats Orchid Island Capital on 6 of the 11 factors compared between the two stocks.

Orchid Island Capital Company Profile

Orchid Island Capital, Inc. is a specialty finance company that invests in residential mortgage-backed securities (RMBS). The Company’s business objective is to provide attractive risk-adjusted total returns to its investors over the long term through a combination of capital appreciation and the payment of regular monthly distributions. Its portfolio consists of two categories of Agency RMBS: pass-through Agency RMBS and structured Agency RMBS. It invests in pass-through securities, which are securities secured by residential real property in which payments of both interest and principal on the securities are generally made monthly. The mortgage loans underlying pass-through certificates are classified into three categories, including fixed-rate mortgages, adjustable-rate mortgages (ARMs) and Hybrid ARMs. It invests in structured Agency RMBS, which include collateralized mortgage obligations, interest only securities, inverse interest only securities and principal only securities.

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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