Contrasting Angel Oak Mortgage REIT (NYSE:AOMR) and Granite Point Mortgage Trust (NYSE:GPMT)

Angel Oak Mortgage REIT (NYSE:AOMR) and Granite Point Mortgage Trust (NYSE:GPMT) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Angel Oak Mortgage REIT and Granite Point Mortgage Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Angel Oak Mortgage REIT	1	2	2	0	2.20
Granite Point Mortgage Trust	1	2	1	0	2.00

Angel Oak Mortgage REIT presently has a consensus target price of $10.08, indicating a potential upside of 12.61%. Granite Point Mortgage Trust has a consensus target price of $2.50, indicating a potential upside of 69.38%. Given Granite Point Mortgage Trust’s higher possible upside, analysts clearly believe Granite Point Mortgage Trust is more favorable than Angel Oak Mortgage REIT.

Dividends

Angel Oak Mortgage REIT pays an annual dividend of $1.28 per share and has a dividend yield of 14.3%. Granite Point Mortgage Trust pays an annual dividend of $0.20 per share and has a dividend yield of 13.6%. Angel Oak Mortgage REIT pays out 200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Granite Point Mortgage Trust pays out -18.7% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Angel Oak Mortgage REIT and Granite Point Mortgage Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Angel Oak Mortgage REIT	$143.65 million	1.55	$44.02 million	$0.64	13.99
Granite Point Mortgage Trust	$131.73 million	0.54	-$41.15 million	($1.07)	-1.38

Angel Oak Mortgage REIT has higher revenue and earnings than Granite Point Mortgage Trust. Granite Point Mortgage Trust is trading at a lower price-to-earnings ratio than Angel Oak Mortgage REIT, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Angel Oak Mortgage REIT has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, Granite Point Mortgage Trust has a beta of 1.63, indicating that its stock price is 63% more volatile than the S&P 500.

Profitability

This table compares Angel Oak Mortgage REIT and Granite Point Mortgage Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Angel Oak Mortgage REIT	10.64%	5.25%	0.50%
Granite Point Mortgage Trust	-29.82%	-11.31%	-3.65%

Insider and Institutional Ownership

80.2% of Angel Oak Mortgage REIT shares are held by institutional investors. Comparatively, 51.6% of Granite Point Mortgage Trust shares are held by institutional investors. 2.9% of Angel Oak Mortgage REIT shares are held by company insiders. Comparatively, 3.1% of Granite Point Mortgage Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Angel Oak Mortgage REIT beats Granite Point Mortgage Trust on 12 of the 16 factors compared between the two stocks.

About Angel Oak Mortgage REIT

Angel Oak Mortgage REIT, Inc., a real estate finance company, focuses on acquiring and investing in first lien non- qualified mortgage loans and other mortgage-related assets in the United States mortgage market. It offers investment securities; residential mortgage loans; and commercial mortgage loans. 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 incorporated in 2018 and is headquartered in Atlanta, Georgia.

About Granite Point Mortgage Trust

Granite Point Mortgage Trust Inc., a real estate investment trust, originates, invests in, and manages senior floating-rate commercial mortgage loans, and other debt and debt-like commercial real estate investments in the United States. The company provides intermediate-term bridge or transitional financing for various purposes, including acquisitions, recapitalizations, and refinancing, as well as a range of business plans, including lease-up, renovation, repositioning, and repurposing of the commercial property. 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 2015 and is headquartered in New York, New York.