MFA Financial (NYSE: MFA) and Granite Point Mortgage Trust (NYSE:GPMT) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, risk, dividends, valuation and profitability.

Analyst Ratings

This is a summary of recent ratings and target prices for MFA Financial and Granite Point Mortgage Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MFA Financial 0 4 1 0 2.20
Granite Point Mortgage Trust 0 2 3 0 2.60

MFA Financial presently has a consensus price target of $8.75, indicating a potential upside of 8.16%. Granite Point Mortgage Trust has a consensus price target of $19.50, indicating a potential upside of 8.88%. Given Granite Point Mortgage Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Granite Point Mortgage Trust is more favorable than MFA Financial.

Institutional and Insider Ownership

80.7% of MFA Financial shares are held by institutional investors. Comparatively, 13.5% of Granite Point Mortgage Trust shares are held by institutional investors. 0.9% of MFA Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

MFA Financial pays an annual dividend of $0.80 per share and has a dividend yield of 9.9%. Granite Point Mortgage Trust pays an annual dividend of $0.32 per share and has a dividend yield of 1.8%. MFA Financial pays out 109.6% 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 pays out 35.2% of its earnings in the form of a dividend.

Profitability

This table compares MFA Financial and Granite Point Mortgage Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MFA Financial 59.03% 9.33% 2.50%
Granite Point Mortgage Trust N/A N/A N/A

Valuation & Earnings

This table compares MFA Financial and Granite Point Mortgage Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MFA Financial $566.49 million 5.67 $312.66 million $0.73 11.08
Granite Point Mortgage Trust N/A N/A N/A $0.91 19.68

MFA Financial has higher revenue and earnings than Granite Point Mortgage Trust. MFA Financial is trading at a lower price-to-earnings ratio than Granite Point Mortgage Trust, indicating that it is currently the more affordable of the two stocks.

Summary

MFA Financial beats Granite Point Mortgage Trust on 7 of the 12 factors compared between the two stocks.

About MFA Financial

MFA Financial, Inc. is engaged in the real estate finance business. The Company’s subsidiaries invest in residential mortgage assets, including Non-Agency mortgage-backed securities (MBS), Agency MBS, residential whole loans and credit risk transfer (CRT) securities. The Company’s Non-Agency MBS portfolio primarily consists of Legacy Non-Agency MBS and 3 Year Step-up securities. In addition to Non-Agency MBS investments, the Company invests in re-performing and non-performing residential whole loans through its interests in certain consolidated trusts. The mortgages collateralizing its Agency MBS portfolio are predominantly Hybrids, 15-year fixed-rate mortgages and adjustable-rate mortgages (ARMs).

About Granite Point Mortgage Trust

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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