Franklin BSP Realty Trust (NYSE:FBRT) and AG Mortgage Investment Trust (NYSE:MITT) Critical Survey

Franklin BSP Realty Trust (NYSE:FBRT) and AG Mortgage Investment Trust (NYSE:MITT) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.

Risk and Volatility

Franklin BSP Realty Trust has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, AG Mortgage Investment Trust has a beta of 1.69, meaning that its share price is 69% more volatile than the S&P 500.

Earnings and Valuation

This table compares Franklin BSP Realty Trust and AG Mortgage Investment Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin BSP Realty Trust	$270.07 million	2.68	$82.27 million	$0.64	13.88
AG Mortgage Investment Trust	$480.33 million	0.55	$55.74 million	$0.93	8.99

Franklin BSP Realty Trust has higher earnings, but lower revenue than AG Mortgage Investment Trust. AG Mortgage Investment Trust 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 Franklin BSP Realty Trust and AG Mortgage Investment Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin BSP Realty Trust	31.03%	7.22%	1.55%
AG Mortgage Investment Trust	10.13%	14.58%	0.60%

Institutional and Insider Ownership

59.9% of Franklin BSP Realty Trust shares are owned by institutional investors. Comparatively, 27.3% of AG Mortgage Investment Trust shares are owned by institutional investors. 1.4% of Franklin BSP Realty Trust shares are owned by company insiders. Comparatively, 3.2% of AG Mortgage Investment Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Franklin BSP Realty Trust and AG Mortgage Investment Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin BSP Realty Trust	0	2	3	0	2.60
AG Mortgage Investment Trust	0	3	5	0	2.63

Franklin BSP Realty Trust presently has a consensus target price of $13.50, suggesting a potential upside of 52.03%. AG Mortgage Investment Trust has a consensus target price of $9.25, suggesting a potential upside of 10.63%. Given Franklin BSP Realty Trust’s higher possible upside, equities research analysts plainly believe Franklin BSP Realty Trust is more favorable than AG Mortgage Investment Trust.

Dividends

Franklin BSP Realty Trust pays an annual dividend of $1.42 per share and has a dividend yield of 16.0%. AG Mortgage Investment Trust pays an annual dividend of $0.92 per share and has a dividend yield of 11.0%. Franklin BSP Realty Trust pays out 221.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AG Mortgage Investment Trust pays out 98.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AG Mortgage Investment Trust has increased its dividend for 2 consecutive years.

Summary

AG Mortgage Investment Trust beats Franklin BSP Realty Trust on 9 of the 17 factors compared between the two stocks.

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.

About AG Mortgage Investment Trust

AG Mortgage Investment Trust, Inc. operates as a residential mortgage real estate investment trust in the United States. Its investment portfolio includes residential investments, including non-agency loans, agency-eligible loans, re-and non-performing loans, and non-agency residential mortgage-backed securities, as well as commercial loans and commercial mortgage-backed securities. 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. AG Mortgage Investment Trust, Inc. was incorporated in 2011 and is based in New York, New York.