Critical Comparison: AG Mortgage Investment Trust (NYSE:MITT) vs. Franklin BSP Realty Trust (NYSE:FBRT)

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

Dividends

AG Mortgage Investment Trust pays an annual dividend of $0.92 per share and has a dividend yield of 10.7%. 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 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. 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 has raised its dividend for 2 consecutive years.

Insider and Institutional Ownership

27.3% of AG Mortgage Investment Trust shares are owned by institutional investors. Comparatively, 59.9% of Franklin BSP Realty Trust shares are owned by institutional investors. 3.8% of AG Mortgage Investment Trust shares are owned by insiders. Comparatively, 0.7% of Franklin BSP Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares AG Mortgage Investment Trust and Franklin BSP Realty Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AG Mortgage Investment Trust	$408.49 million	0.67	$55.74 million	$0.93	9.20
Franklin BSP Realty Trust	$270.07 million	2.68	$82.27 million	$0.64	13.87

Franklin BSP Realty Trust has lower revenue, but higher earnings 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.

Analyst Ratings

This is a summary of recent recommendations for AG Mortgage Investment Trust and Franklin BSP Realty Trust, as provided by MarketBeat.com.

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

AG Mortgage Investment Trust currently has a consensus target price of $9.25, suggesting a potential upside of 8.06%. Franklin BSP Realty Trust has a consensus target price of $13.50, suggesting a potential upside of 52.06%. Given Franklin BSP Realty Trust’s higher possible upside, analysts plainly believe Franklin BSP Realty Trust is more favorable than AG Mortgage Investment Trust.

Volatility and Risk

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

Profitability

This table compares AG Mortgage Investment Trust and Franklin BSP Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AG Mortgage Investment Trust	11.03%	13.88%	0.59%
Franklin BSP Realty Trust	31.03%	7.22%	1.55%

Summary

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

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.

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.