Head-To-Head Contrast: Starwood Property Trust (NYSE:STWD) and Granite Point Mortgage Trust (NYSE:GPMT)

Starwood Property Trust (NYSE:STWD) and Granite Point Mortgage Trust (NYSE:GPMT) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, analyst recommendations, valuation and profitability.

Insider & Institutional Ownership

49.8% of Starwood Property Trust shares are owned by institutional investors. Comparatively, 51.6% of Granite Point Mortgage Trust shares are owned by institutional investors. 5.4% of Starwood Property Trust shares are owned by company insiders. Comparatively, 3.1% of Granite Point Mortgage Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for Starwood Property Trust and Granite Point Mortgage Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Starwood Property Trust	1	2	3	0	2.33
Granite Point Mortgage Trust	1	3	1	0	2.00

Starwood Property Trust presently has a consensus price target of $20.63, indicating a potential upside of 13.11%. Granite Point Mortgage Trust has a consensus price target of $2.83, indicating a potential upside of 25.65%. Given Granite Point Mortgage Trust’s higher probable upside, analysts plainly believe Granite Point Mortgage Trust is more favorable than Starwood Property Trust.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Starwood Property Trust	20.28%	8.41%	0.92%
Granite Point Mortgage Trust	-39.73%	-30.39%	-9.23%

Valuation & Earnings

This table compares Starwood Property Trust and Granite Point Mortgage Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Starwood Property Trust	$1.95 billion	3.47	$359.93 million	$1.05	17.37
Granite Point Mortgage Trust	$185.55 million	0.58	-$207.05 million	($1.44)	-1.57

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

Risk & Volatility

Starwood Property Trust has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, Granite Point Mortgage Trust has a beta of 1.72, suggesting that its stock price is 72% more volatile than the S&P 500.

Dividends

Starwood Property Trust pays an annual dividend of $1.92 per share and has a dividend yield of 10.5%. Granite Point Mortgage Trust pays an annual dividend of $0.20 per share and has a dividend yield of 8.9%. Starwood Property Trust pays out 182.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Granite Point Mortgage Trust pays out -13.9% of its earnings in the form of a dividend.

Summary

Starwood Property Trust beats Granite Point Mortgage Trust on 12 of the 16 factors compared between the two stocks.

About Starwood Property Trust

Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States and internationally. The company operates through Commercial and Residential Lending, Infrastructure Lending, Property, and Investing and Servicing segments. The Commercial and Residential Lending segment originates, acquires, finances, and manages commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), and residential mortgage-backed securities, as well as other real estate and real estate-related debt investments, include distressed or non-performing loans. The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments. The Property segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment. The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets that include properties acquired from CMBS trusts. The company qualifies as a REIT for federal income tax purposes 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 incorporated in 2009 and is headquartered in Greenwich, Connecticut.

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.