Financial Analysis: Rithm Property Trust (NYSE:RPT) versus PennyMac Mortgage Investment Trust (NYSE:PMT)

Rithm Property Trust (NYSE:RPT) and PennyMac Mortgage Investment Trust (NYSE:PMT) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.

Volatility and Risk

Rithm Property Trust has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500. Comparatively, PennyMac Mortgage Investment Trust has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.

Dividends

Rithm Property Trust pays an annual dividend of $1.44 per share and has a dividend yield of 12.9%. PennyMac Mortgage Investment Trust pays an annual dividend of $1.60 per share and has a dividend yield of 17.9%. Rithm Property Trust pays out -553.8% of its earnings in the form of a dividend. PennyMac Mortgage Investment Trust pays out 112.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent ratings for Rithm Property Trust and PennyMac Mortgage Investment Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rithm Property Trust	1	0	0	1	2.50
PennyMac Mortgage Investment Trust	2	4	3	0	2.11

PennyMac Mortgage Investment Trust has a consensus target price of $11.50, suggesting a potential upside of 28.92%. Given PennyMac Mortgage Investment Trust’s higher possible upside, analysts plainly believe PennyMac Mortgage Investment Trust is more favorable than Rithm Property Trust.

Earnings & Valuation

This table compares Rithm Property Trust and PennyMac Mortgage Investment Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rithm Property Trust	$52.80 million	1.65	$1.47 million	($0.26)	-43.08
PennyMac Mortgage Investment Trust	$307.46 million	2.53	$127.87 million	$1.42	6.28

PennyMac Mortgage Investment Trust has higher revenue and earnings than Rithm Property Trust. Rithm Property Trust is trading at a lower price-to-earnings ratio than PennyMac Mortgage Investment Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Rithm Property Trust and PennyMac Mortgage Investment Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rithm Property Trust	5.87%	1.20%	0.29%
PennyMac Mortgage Investment Trust	47.79%	12.50%	0.76%

Insider & Institutional Ownership

58.6% of Rithm Property Trust shares are owned by institutional investors. Comparatively, 67.4% of PennyMac Mortgage Investment Trust shares are owned by institutional investors. 0.4% of Rithm Property Trust shares are owned by company insiders. Comparatively, 1.0% of PennyMac Mortgage Investment Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

PennyMac Mortgage Investment Trust beats Rithm Property Trust on 13 of the 17 factors compared between the two stocks.

About Rithm Property Trust

Rithm Property Trust Inc is a real estate investment trust (REIT) externally managed by an affiliate of Rithm Capital Corp. (Rithm). The company focuses on commercial real estate-focused investment, including originating, acquiring and managing portfolios of CMBS, commercial real property, commercial mortgage loans and other CRE investments. It has two reportable operating segments: Residential and Commercial. The majority of the company’s revenue is derived from the Residential segment, which is focused on managing a portfolio that includes residential mortgage assets, including whole mortgage loans, RMBS and beneficial interests.

About PennyMac Mortgage Investment Trust

PennyMac Mortgage Investment Trust, through its subsidiary, primarily invests in mortgage-related assets in the United States. The company operates through: Credit Sensitive Strategies, Interest Rate Sensitive Strategies, Correspondent Production segments. Its Credit Sensitive Strategies segment invests in credit risk transfer (CRT) agreements, CRT securities, subordinate mortgage-backed securities (MBS), distressed loans, and real estate. The company's Interest Rate Sensitive Strategies segment engages in investing in mortgage servicing rights, excess servicing spreads, and agency and senior non-agency MBS, as well as related interest rate hedging activities. Its Correspondent Production segment is involved in purchasing, pooling, and reselling newly originated prime credit residential loans directly or in the form of MBS. The company primarily sells its loans to government-sponsored entities or PennyMac Loan Services, LLC. 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 shareholders. The company was incorporated in 2009 and is headquartered in Westlake Village, California.