Critical Analysis: Granite Point Mortgage Trust (NYSE:GPMT) & DigitalBridge Group (NYSE:DBRG)

Granite Point Mortgage Trust (NYSE:GPMTGet Free Report) and DigitalBridge Group (NYSE:DBRGGet Free Report) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Insider & Institutional Ownership

51.6% of Granite Point Mortgage Trust shares are held by institutional investors. Comparatively, 92.7% of DigitalBridge Group shares are held by institutional investors. 3.1% of Granite Point Mortgage Trust shares are held by insiders. Comparatively, 3.6% of DigitalBridge Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Granite Point Mortgage Trust -83.98% -18.94% -5.47%
DigitalBridge Group 18.57% 6.06% 2.88%

Dividends

Granite Point Mortgage Trust pays an annual dividend of $0.20 per share and has a dividend yield of 8.1%. DigitalBridge Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.4%. Granite Point Mortgage Trust pays out -6.5% of its earnings in the form of a dividend. DigitalBridge Group pays out 13.3% 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. Granite Point Mortgage Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Granite Point Mortgage Trust and DigitalBridge Group”s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Granite Point Mortgage Trust $185.55 million 0.64 -$207.05 million ($3.08) -0.80
DigitalBridge Group $228.14 million 8.33 $70.52 million $0.30 35.93

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

Analyst Ratings

This is a summary of recent ratings for Granite Point Mortgage Trust and DigitalBridge Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Granite Point Mortgage Trust 0 2 1 0 2.33
DigitalBridge Group 0 1 6 2 3.11

Granite Point Mortgage Trust currently has a consensus target price of $3.00, suggesting a potential upside of 21.95%. DigitalBridge Group has a consensus target price of $15.94, suggesting a potential upside of 47.84%. Given DigitalBridge Group’s stronger consensus rating and higher possible upside, analysts clearly believe DigitalBridge Group is more favorable than Granite Point Mortgage Trust.

Risk and Volatility

Granite Point Mortgage Trust has a beta of 1.71, suggesting that its stock price is 71% more volatile than the S&P 500. Comparatively, DigitalBridge Group has a beta of 1.67, suggesting that its stock price is 67% more volatile than the S&P 500.

Summary

DigitalBridge Group beats Granite Point Mortgage Trust on 14 of the 17 factors compared between the two stocks.

About Granite Point Mortgage Trust

(Get Free Report)

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 DigitalBridge Group

(Get Free Report)

DigitalBridge is an infrastructure investment firm specializing in digital infrastructure assets. They provide services to institutional investors. They primarily invest in data centers, cell towers, fiber networks, small cells, and edge infrastructure. DigitalBridge Group, Inc. was founded in 1991 and is headquartered in Boca Raton, Florida with additional offices in Los Angles, California, and New York New York.

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