Granite Point Mortgage Trust (NYSE:GPMT – Get Free Report) and Ready Capital (NYSE:RC – Get Free Report) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.
Dividends
Granite Point Mortgage Trust pays an annual dividend of $0.20 per share and has a dividend yield of 7.2%. Ready Capital pays an annual dividend of $0.50 per share and has a dividend yield of 11.9%. Granite Point Mortgage Trust pays out -9.4% of its earnings in the form of a dividend. Ready Capital pays out -27.0% 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. Ready Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Granite Point Mortgage Trust and Ready Capital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Granite Point Mortgage Trust | -59.38% | -26.91% | -7.96% |
| Ready Capital | -40.59% | 3.76% | 0.72% |
Risk & Volatility
Analyst Recommendations
This is a breakdown of recent ratings for Granite Point Mortgage Trust and Ready Capital, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Granite Point Mortgage Trust | 0 | 2 | 1 | 0 | 2.33 |
| Ready Capital | 1 | 5 | 1 | 0 | 2.00 |
Granite Point Mortgage Trust currently has a consensus price target of $3.13, indicating a potential upside of 11.81%. Ready Capital has a consensus price target of $5.88, indicating a potential upside of 39.71%. Given Ready Capital’s higher possible upside, analysts clearly believe Ready Capital is more favorable than Granite Point Mortgage Trust.
Institutional & Insider Ownership
51.6% of Granite Point Mortgage Trust shares are owned by institutional investors. Comparatively, 55.9% of Ready Capital shares are owned by institutional investors. 3.1% of Granite Point Mortgage Trust shares are owned by insiders. Comparatively, 1.1% of Ready Capital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Granite Point Mortgage Trust and Ready Capital”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 | $185.55 million | 0.71 | -$207.05 million | ($2.12) | -1.32 |
| Ready Capital | $896.97 million | 0.77 | -$435.76 million | ($1.85) | -2.27 |
Granite Point Mortgage Trust has higher earnings, but lower revenue than Ready Capital. Ready Capital 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.
Summary
Ready Capital beats Granite Point Mortgage Trust on 10 of the 15 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 Ready Capital
Ready Capital Corporation operates as a real estate finance company in the United States. It operates through two segments: LMM Commercial Real Estate and Small Business Lending. The company originates, acquires, finances, and services lower-to-middle-market (LLM) commercial real estate loans, small business administration (SBA) loans, residential mortgage loans, construction loans, and mortgage-backed securities collateralized primarily by LLM loans, or other real estate-related investments. The LMM Commercial Real Estate segment originates LLM loans across the full life-cycle of an LLM property, including construction, bridge, stabilized, and agency loan origination channels. The Small Business Lending segment acquires, originates, and services owner-occupied loans guaranteed by the SBA under its SBA Section 7(a) Program; and acquires purchased future receivables. 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. The company was formerly known as Sutherland Asset Management Corporation and changed its name to Ready Capital Corporation in September 2018. Ready Capital Corporation was founded in 2007 and is headquartered in New York, New York.
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