Analyzing PennyMac Mortgage Investment Trust (NYSE:PMT) and Medalist Diversified REIT (NASDAQ:MDRR)

Medalist Diversified REIT (NASDAQ:MDRR) and PennyMac Mortgage Investment Trust (NYSE:PMT) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Risk & Volatility

Medalist Diversified REIT has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, PennyMac Mortgage Investment Trust has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500.

Insider and Institutional Ownership

17.4% of Medalist Diversified REIT shares are held by institutional investors. Comparatively, 67.4% of PennyMac Mortgage Investment Trust shares are held by institutional investors. 16.9% of Medalist Diversified REIT shares are held by insiders. Comparatively, 0.9% of PennyMac Mortgage Investment Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Medalist Diversified REIT and PennyMac Mortgage Investment Trust’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Medalist Diversified REIT	$10.17 million	1.38	-$4.57 million	($1.84)	-6.83
PennyMac Mortgage Investment Trust	$429.02 million	2.84	$199.65 million	$1.50	9.36

PennyMac Mortgage Investment Trust has higher revenue and earnings than Medalist Diversified REIT. Medalist Diversified REIT is trading at a lower price-to-earnings ratio than PennyMac Mortgage Investment Trust, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Medalist Diversified REIT and PennyMac Mortgage Investment Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medalist Diversified REIT	0	0	0	0	N/A
PennyMac Mortgage Investment Trust	0	4	3	0	2.43

PennyMac Mortgage Investment Trust has a consensus price target of $14.93, suggesting a potential upside of 6.37%. Given PennyMac Mortgage Investment Trust’s higher probable upside, analysts plainly believe PennyMac Mortgage Investment Trust is more favorable than Medalist Diversified REIT.

Profitability

This table compares Medalist Diversified REIT and PennyMac Mortgage Investment Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medalist Diversified REIT	-19.20%	-21.37%	-4.03%
PennyMac Mortgage Investment Trust	47.60%	13.29%	1.48%

Dividends

Medalist Diversified REIT pays an annual dividend of $0.16 per share and has a dividend yield of 1.3%. PennyMac Mortgage Investment Trust pays an annual dividend of $1.60 per share and has a dividend yield of 11.4%. Medalist Diversified REIT pays out -8.7% of its earnings in the form of a dividend. PennyMac Mortgage Investment Trust pays out 106.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

PennyMac Mortgage Investment Trust beats Medalist Diversified REIT on 13 of the 15 factors compared between the two stocks.

About Medalist Diversified REIT

Medalist Diversified REIT Inc. is a Virginia-based real estate investment trust that specializes in acquiring, owning and managing commercial real estate in the Southeast region of the U.S. The Company's strategy is to focus on commercial real estate which is expected to provide an attractive balance of risk and returns. Medalist utilizes a rigorous, consistent and replicable process for sourcing and conducting due diligence of acquisitions.

About PennyMac Mortgage Investment Trust

PennyMac Mortgage Investment Trust, through its subsidiary, primarily invests in mortgage-related assets in the United States. The company operates through: Credit Sensitive Strategies, Interest Rate Sensitive Strategies, Correspondent Production segments. Its Credit Sensitive Strategies segment invests in credit risk transfer (CRT) agreements, CRT securities, subordinate mortgage-backed securities (MBS), distressed loans, and real estate. The company's Interest Rate Sensitive Strategies segment engages in investing in mortgage servicing rights, excess servicing spreads, and agency and senior non-agency MBS, as well as related interest rate hedging activities. Its Correspondent Production segment is involved in purchasing, pooling, and reselling newly originated prime credit residential loans directly or in the form of MBS. The company primarily sells its loans to government-sponsored entities or PennyMac Loan Services, LLC. 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 shareholders. The company was incorporated in 2009 and is headquartered in Westlake Village, California.