Head-To-Head Review: TPG RE Finance Trust (NYSE:TRTX) vs. Franklin BSP Realty Trust (NYSE:FBRT)

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Franklin BSP Realty Trust and TPG RE Finance Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin BSP Realty Trust	1	2	3	0	2.33
TPG RE Finance Trust	0	3	4	0	2.57

Franklin BSP Realty Trust presently has a consensus target price of $11.00, indicating a potential upside of 72.82%. TPG RE Finance Trust has a consensus target price of $10.00, indicating a potential upside of 58.10%. Given Franklin BSP Realty Trust’s higher probable upside, analysts plainly believe Franklin BSP Realty Trust is more favorable than TPG RE Finance Trust.

Earnings & Valuation

This table compares Franklin BSP Realty Trust and TPG RE Finance Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin BSP Realty Trust	$270.07 million	1.96	$82.27 million	$0.44	14.47
TPG RE Finance Trust	$332.58 million	1.46	$60.32 million	$0.54	11.71

Franklin BSP Realty Trust has higher earnings, but lower revenue than TPG RE Finance Trust. TPG RE Finance 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.

Insider & Institutional Ownership

59.9% of Franklin BSP Realty Trust shares are owned by institutional investors. Comparatively, 57.1% of TPG RE Finance Trust shares are owned by institutional investors. 1.3% of Franklin BSP Realty Trust shares are owned by company insiders. Comparatively, 3.0% of TPG RE Finance Trust shares are owned 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.

Volatility & Risk

Franklin BSP Realty Trust has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, TPG RE Finance Trust has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500.

Dividends

Franklin BSP Realty Trust pays an annual dividend of $0.80 per share and has a dividend yield of 12.6%. TPG RE Finance Trust pays an annual dividend of $0.96 per share and has a dividend yield of 15.2%. Franklin BSP Realty Trust pays out 181.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TPG RE Finance Trust pays out 177.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TPG RE Finance Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Franklin BSP Realty Trust and TPG RE Finance Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin BSP Realty Trust	20.49%	5.82%	1.17%
TPG RE Finance Trust	17.03%	6.85%	1.66%

Summary

TPG RE Finance Trust beats Franklin BSP Realty Trust on 10 of the 16 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 TPG RE Finance Trust

TPG RE Finance Trust, Inc., a commercial real estate finance company, originates, acquires, and manages commercial mortgage loans and other commercial real estate-related debt instruments in the United States. It invests in commercial mortgage loans; subordinate mortgage interests, mezzanine loans, secured real estate securities, note financing, preferred equity, and miscellaneous debt instruments; and commercial real estate collateralized loan obligations and commercial mortgage-backed securities secured by properties primarily in the multifamily, life science, mixed-use, hospitality, self storage, industrial, and retail real estate sectors. 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. TPG RE Finance Trust, Inc. was incorporated in 2014 and is based in New York, New York.