Rithm Capital (NYSE:RITM) and Granite Point Mortgage Trust (NYSE:GPMT) Head-To-Head Review

Rithm Capital (NYSE:RITM) and Granite Point Mortgage Trust (NYSE:GPMT) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Volatility & Risk

Rithm Capital has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Granite Point Mortgage Trust has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500.

Valuation and Earnings

This table compares Rithm Capital and Granite Point Mortgage Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rithm Capital	$4.59 billion	1.13	$681.45 million	$0.63	14.76
Granite Point Mortgage Trust	$131.73 million	0.16	-$41.15 million	($20.10)	-0.21

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

Profitability

This table compares Rithm Capital and Granite Point Mortgage Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rithm Capital	8.71%	20.03%	2.77%
Granite Point Mortgage Trust	-73.75%	-10.25%	-3.37%

Dividends

Rithm Capital pays an annual dividend of $1.00 per share and has a dividend yield of 10.8%. Granite Point Mortgage Trust pays an annual dividend of $0.40 per share and has a dividend yield of 9.3%. Rithm Capital pays out 158.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Granite Point Mortgage Trust pays out -2.0% of its earnings in the form of a dividend.

Institutional and Insider Ownership

44.9% of Rithm Capital shares are owned by institutional investors. Comparatively, 51.6% of Granite Point Mortgage Trust shares are owned by institutional investors. 0.6% of Rithm Capital shares are owned by insiders. Comparatively, 6.4% of Granite Point Mortgage Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Rithm Capital and Granite Point Mortgage Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rithm Capital	1	0	10	0	2.82
Granite Point Mortgage Trust	1	3	0	0	1.75

Rithm Capital currently has a consensus price target of $12.80, indicating a potential upside of 37.63%. Granite Point Mortgage Trust has a consensus price target of $13.33, indicating a potential upside of 210.08%. Given Granite Point Mortgage Trust’s higher probable upside, analysts plainly believe Granite Point Mortgage Trust is more favorable than Rithm Capital.

Summary

Rithm Capital beats Granite Point Mortgage Trust on 11 of the 16 factors compared between the two stocks.

About Rithm Capital

Rithm Capital Corp. operates as an asset manager focused on real estate, credit, and financial services. It operates through Origination and Servicing, Investment Portfolio, Mortgage Loans Receivable, and Asset Management segments. Its investment portfolio primarily comprises of mortgage servicing rights (MSR), and MSR financing receivables, title, appraisal and property preservation, excess MSRs, and services advance investments; real estate securities, call rights, SFR properties, and residential mortgage loans; consumer and business purpose loans; and asset management related investments. 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 formerly known as New Residential Investment Corp. and changed its name to Rithm Capital Corp. in August 2022. Rithm Capital Corp. was incorporated in 2011 and is based in New York, New York.

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.