Analyzing Granite Point Mortgage Trust (GPMT) & MTGE Investment (MTGE)

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

Earnings and Valuation

This table compares Granite Point Mortgage Trust and MTGE Investment’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Granite Point Mortgage Trust N/A N/A N/A $1.18 14.34
MTGE Investment $108.19 million 7.15 $43.67 million $1.80 9.39

MTGE Investment has higher revenue and earnings than Granite Point Mortgage Trust. MTGE Investment 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.

Dividends

Granite Point Mortgage Trust pays an annual dividend of $0.70 per share and has a dividend yield of 4.1%. MTGE Investment pays an annual dividend of $2.00 per share and has a dividend yield of 11.8%. Granite Point Mortgage Trust pays out 59.3% of its earnings in the form of a dividend. MTGE Investment pays out 111.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

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

Net Margins Return on Equity Return on Assets
Granite Point Mortgage Trust N/A N/A N/A
MTGE Investment 89.01% 10.52% 1.72%

Analyst Ratings

This is a summary of current ratings and target prices for Granite Point Mortgage Trust and MTGE Investment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Granite Point Mortgage Trust 0 1 4 0 2.80
MTGE Investment 0 1 3 0 2.75

Granite Point Mortgage Trust currently has a consensus price target of $19.50, indicating a potential upside of 15.25%. MTGE Investment has a consensus price target of $20.50, indicating a potential upside of 21.30%. Given MTGE Investment’s higher probable upside, analysts plainly believe MTGE Investment is more favorable than Granite Point Mortgage Trust.

Insider and Institutional Ownership

16.0% of Granite Point Mortgage Trust shares are owned by institutional investors. Comparatively, 74.2% of MTGE Investment shares are owned by institutional investors. 1.1% of MTGE Investment shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

MTGE Investment beats Granite Point Mortgage Trust on 9 of the 13 factors compared between the two stocks.

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.

About MTGE Investment

MTGE Investment Corp., formerly American Capital Mortgage Investment Corp., is a real estate investment trust. The Company invests in, finances and manages a leveraged portfolio of real estate-related investments, which include agency residential mortgage-backed securities (RMBS), non-agency securities, other mortgage-related investments and other real estate investments. Agency RMBS includes residential mortgage pass-through certificates and collateralized mortgage obligations (CMOs) structured from residential mortgage pass-through certificates for which the principal and interest payments are guaranteed by a government-sponsored enterprise (GSE), or by a United States Government agency, such as Government National Mortgage Association (Ginnie Mae). Non-agency securities include securities backed by residential mortgages that are not guaranteed by a GSE or the United States Government agency, and credit risk transfer securities (CRT). The Company’s manager is MTGE Management, LLC.

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