Head to Head Contrast: Franklin BSP Realty Trust (NYSE:FBRT) versus Chicago Atlantic Real Estate Finance (NASDAQ:REFI)

Chicago Atlantic Real Estate Finance (NASDAQ:REFI) and Franklin BSP Realty Trust (NYSE:FBRT) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, risk, valuation, earnings, analyst recommendations, profitability and dividends.

Volatility & Risk

Chicago Atlantic Real Estate Finance has a beta of 0.26, meaning that its stock price is 74% less volatile than the S&P 500. Comparatively, Franklin BSP Realty Trust has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Chicago Atlantic Real Estate Finance and Franklin BSP Realty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chicago Atlantic Real Estate Finance	0	0	2	1	3.33
Franklin BSP Realty Trust	0	0	5	2	3.29

Chicago Atlantic Real Estate Finance currently has a consensus price target of $20.00, indicating a potential upside of 40.45%. Franklin BSP Realty Trust has a consensus price target of $15.50, indicating a potential upside of 33.22%. Given Chicago Atlantic Real Estate Finance’s stronger consensus rating and higher probable upside, equities analysts clearly believe Chicago Atlantic Real Estate Finance is more favorable than Franklin BSP Realty Trust.

Dividends

Chicago Atlantic Real Estate Finance pays an annual dividend of $1.88 per share and has a dividend yield of 13.2%. Franklin BSP Realty Trust pays an annual dividend of $1.42 per share and has a dividend yield of 12.2%. Chicago Atlantic Real Estate Finance pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Franklin BSP Realty Trust pays out 171.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chicago Atlantic Real Estate Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

25.5% of Chicago Atlantic Real Estate Finance shares are owned by institutional investors. Comparatively, 59.9% of Franklin BSP Realty Trust shares are owned by institutional investors. 12.3% of Chicago Atlantic Real Estate Finance shares are owned by insiders. Comparatively, 0.7% of Franklin BSP Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Chicago Atlantic Real Estate Finance and Franklin BSP Realty Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chicago Atlantic Real Estate Finance	$54.78 million	5.43	$38.71 million	$1.88	7.57
Franklin BSP Realty Trust	$548.93 million	1.77	$95.88 million	$0.83	14.02

Franklin BSP Realty Trust has higher revenue and earnings than Chicago Atlantic Real Estate Finance. Chicago Atlantic Real Estate Finance is trading at a lower price-to-earnings ratio than Franklin BSP Realty Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Chicago Atlantic Real Estate Finance and Franklin BSP Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chicago Atlantic Real Estate Finance	64.57%	13.17%	10.10%
Franklin BSP Realty Trust	45.56%	8.17%	1.70%

Summary

Chicago Atlantic Real Estate Finance beats Franklin BSP Realty Trust on 10 of the 17 factors compared between the two stocks.

About Chicago Atlantic Real Estate Finance

Chicago Atlantic Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. The company engages in originating, structuring, and investing in first mortgage loans and alternative structured financings secured by commercial real estate properties. Its portfolio primarily includes offers senior loans to state-licensed operators in the cannabis industry. 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. Chicago Atlantic Real Estate Finance, Inc. was incorporated in 2021 and is headquartered in Chicago, Illinois.

About Franklin BSP Realty Trust

Benefit Street Partners operates as a self-managed real estate investment trust (REIT). BSP earns income from investing in a leveraged portfolio of residential mortgage pass-through securities consisting almost exclusively of adjustable-rate mortgage (ARM) securities issued and guaranteed by government-sponsored enterprises, either Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac) (together, the government-sponsored enterprises (GSEs)), or by an agency of the federal government, Government National Mortgage Association (Ginnie Mae). BSP’s investment strategy focuses on managing a portfolio of residential mortgage investments consisting almost exclusively of ARM Agency Securities. As of December 31, 2012, the Company’s securities consisted of Agency Securities classified as available-for-sale and Residential mortgage securities classified as held-to-maturity.