Western Asset Mortgage Capital (WMC) and Blackstone Mortgage Trust (NYSE:BXMT) Financial Review

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Western Asset Mortgage Capital (NYSE:WMC) and Blackstone Mortgage Trust (NYSE:BXMT) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, institutional ownership, valuation, profitability, analyst recommendations, earnings and dividends.

Dividends

Western Asset Mortgage Capital pays an annual dividend of $1.24 per share and has a dividend yield of 12.8%. Blackstone Mortgage Trust pays an annual dividend of $2.48 per share and has a dividend yield of 7.7%. Western Asset Mortgage Capital pays out 107.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blackstone Mortgage Trust pays out 107.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Western Asset Mortgage Capital and Blackstone Mortgage Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Western Asset Mortgage Capital 0 0 0 0 N/A
Blackstone Mortgage Trust 0 5 4 0 2.44

Blackstone Mortgage Trust has a consensus target price of $33.50, indicating a potential upside of 3.68%. Given Blackstone Mortgage Trust’s higher probable upside, analysts plainly believe Blackstone Mortgage Trust is more favorable than Western Asset Mortgage Capital.

Volatility & Risk

Western Asset Mortgage Capital has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500. Comparatively, Blackstone Mortgage Trust has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500.

Valuation and Earnings

This table compares Western Asset Mortgage Capital and Blackstone Mortgage Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Western Asset Mortgage Capital $154.74 million 2.60 $85.09 million $1.15 8.40
Blackstone Mortgage Trust $303.05 million 12.62 $217.63 million $2.31 13.99

Blackstone Mortgage Trust has higher revenue and earnings than Western Asset Mortgage Capital. Western Asset Mortgage Capital is trading at a lower price-to-earnings ratio than Blackstone Mortgage Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Western Asset Mortgage Capital and Blackstone Mortgage Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Western Asset Mortgage Capital 37.46% 11.92% 1.18%
Blackstone Mortgage Trust 49.22% 9.24% 2.41%

Insider & Institutional Ownership

43.3% of Western Asset Mortgage Capital shares are held by institutional investors. Comparatively, 62.2% of Blackstone Mortgage Trust shares are held by institutional investors. 0.5% of Western Asset Mortgage Capital shares are held by insiders. Comparatively, 1.0% of Blackstone Mortgage Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Blackstone Mortgage Trust beats Western Asset Mortgage Capital on 13 of the 15 factors compared between the two stocks.

Western Asset Mortgage Capital Company Profile

Western Asset Mortgage Capital Corporation operates as a real estate investment trust in the United States. It focuses on investing in, financing, and managing a portfolio of agency and non-agency residential mortgage-backed securities and commercial mortgage-backed securities, residential whole-loans, residential bridge loans, and other financial assets. 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 2009 and is based in Pasadena, California.

Blackstone Mortgage Trust Company Profile

Blackstone Mortgage Trust, Inc., a real estate finance company, originates senior loans collateralized by properties in North America and Europe. The company operates as a real estate investment trust for federal income tax purposes. It generally would not be subject to U.S. federal income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as Capital Trust, Inc. and changed its name to Blackstone Mortgage Trust, Inc. in May 2013. Blackstone Mortgage Trust, Inc. was founded in 1966 and is headquartered in New York, New York.

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