Bimini Capital Management (OTCMKTS:BMNM) vs. Starwood Property Trust (NYSE:STWD) Critical Analysis

Bimini Capital Management (OTCMKTS:BMNM) and Starwood Property Trust (NYSE:STWD) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Bimini Capital Management and Starwood Property Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bimini Capital Management	0	0	0	0	0.00
Starwood Property Trust	0	4	3	0	2.43

Starwood Property Trust has a consensus target price of $19.80, indicating a potential upside of 9.12%. Given Starwood Property Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Starwood Property Trust is more favorable than Bimini Capital Management.

Insider and Institutional Ownership

49.8% of Starwood Property Trust shares are held by institutional investors. 45.4% of Bimini Capital Management shares are held by company insiders. Comparatively, 5.8% of Starwood Property Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Bimini Capital Management has a beta of 0.13, indicating that its share price is 87% less volatile than the S&P 500. Comparatively, Starwood Property Trust has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Earnings & Valuation

This table compares Bimini Capital Management and Starwood Property Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bimini Capital Management	$16.89 million	1.70	$5.80 million	$0.58	4.91
Starwood Property Trust	$1.84 billion	3.65	$411.54 million	$1.16	15.64

Starwood Property Trust has higher revenue and earnings than Bimini Capital Management. Bimini Capital Management 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.

Dividends

Bimini Capital Management pays an annual dividend of $0.13 per share and has a dividend yield of 4.6%. Starwood Property Trust pays an annual dividend of $1.92 per share and has a dividend yield of 10.6%. Bimini Capital Management pays out 22.4% of its earnings in the form of a dividend. Starwood Property Trust pays out 165.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Bimini Capital Management and Starwood Property Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bimini Capital Management	34.35%	63.32%	4.15%
Starwood Property Trust	22.32%	8.16%	0.91%

Summary

Starwood Property Trust beats Bimini Capital Management on 11 of the 16 factors compared between the two stocks.

About Bimini Capital Management

Bimini Capital Management, Inc., through its subsidiaries, operates as a specialty finance company in the United States. The company operates in two segments, Asset Management and Investment Portfolio. The Asset Management segment includes investment advisory services by Bimini Advisors to Orchid Island Capital, Inc. and Royal Palm Capital, LLC. The Investment Portfolio segment engages in investment activities conducted by Royal Palm Capital, LLC. It invests in residential mortgage-backed securities. The company was formerly known as Opteum Inc. and changed its name to Bimini Capital Management, Inc. in September 2007. Bimini Capital Management, Inc. was founded in 2003 and is based in Vero Beach, Florida.

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.