Granite Point Mortgage Trust (NYSE:GPMT – Get Free Report) and NexPoint Real Estate Finance (NYSE:NREF – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.
Institutional & Insider Ownership
51.6% of Granite Point Mortgage Trust shares are owned by institutional investors. Comparatively, 67.8% of NexPoint Real Estate Finance shares are owned by institutional investors. 3.1% of Granite Point Mortgage Trust shares are owned by insiders. Comparatively, 55.7% of NexPoint Real Estate Finance shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Dividends
Granite Point Mortgage Trust pays an annual dividend of $0.20 per share and has a dividend yield of 14.1%. NexPoint Real Estate Finance pays an annual dividend of $2.00 per share and has a dividend yield of 15.5%. Granite Point Mortgage Trust pays out -17.2% of its earnings in the form of a dividend. NexPoint Real Estate Finance pays out 69.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Granite Point Mortgage Trust | -31.24% | -15.52% | -4.80% |
| NexPoint Real Estate Finance | 122.60% | 15.63% | 1.04% |
Valuation and Earnings
This table compares Granite Point Mortgage Trust and NexPoint Real Estate Finance”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Granite Point Mortgage Trust | $131.73 million | 0.51 | -$41.15 million | ($1.16) | -1.22 |
| NexPoint Real Estate Finance | $151.95 million | 1.50 | $110.28 million | $2.90 | 4.45 |
NexPoint Real Estate Finance has higher revenue and earnings than Granite Point Mortgage Trust. Granite Point Mortgage Trust is trading at a lower price-to-earnings ratio than NexPoint Real Estate Finance, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Granite Point Mortgage Trust has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500. Comparatively, NexPoint Real Estate Finance has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and target prices for Granite Point Mortgage Trust and NexPoint Real Estate Finance, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Granite Point Mortgage Trust | 1 | 2 | 1 | 0 | 2.00 |
| NexPoint Real Estate Finance | 1 | 3 | 0 | 0 | 1.75 |
Granite Point Mortgage Trust currently has a consensus target price of $2.68, indicating a potential upside of 89.63%. NexPoint Real Estate Finance has a consensus target price of $14.50, indicating a potential upside of 12.40%. Given Granite Point Mortgage Trust’s stronger consensus rating and higher possible upside, research analysts plainly believe Granite Point Mortgage Trust is more favorable than NexPoint Real Estate Finance.
Summary
NexPoint Real Estate Finance beats Granite Point Mortgage Trust on 11 of the 16 factors compared between the two stocks.
About Granite Point Mortgage Trust
Granite Point Mortgage Trust Inc., a real estate investment trust, originates, invests in, and manages senior floating-rate commercial mortgage loans, and other debt and debt-like commercial real estate investments in the United States. The company provides intermediate-term bridge or transitional financing for various purposes, including acquisitions, recapitalizations, and refinancing, as well as a range of business plans, including lease-up, renovation, repositioning, and repurposing of the commercial property. 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 stockholders. The company was founded in 2015 and is headquartered in New York, New York.
About NexPoint Real Estate Finance
NexPoint Real Estate Finance, Inc. operates as a commercial mortgage real estate investment trust in the United States. It focuses on originating, structuring, and investing in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties, and common equity investments, as well as multifamily and single-family rental commercial mortgage-backed securities securitizations, multifamily structured credit risk notes, and mortgage-backed securities or target assets. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. NexPoint Real Estate Finance, Inc. was incorporated in 2019 and is based in Dallas, Texas.
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