Capital Trust (NYSE: BXMT) and New York Mortgage Trust (NASDAQ:NYMT) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Dividends

Capital Trust pays an annual dividend of $2.48 per share and has a dividend yield of 7.9%. New York Mortgage Trust pays an annual dividend of $0.80 per share and has a dividend yield of 12.7%. Capital Trust pays out 106.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. New York Mortgage Trust pays out 156.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Capital Trust has raised its dividend for 3 consecutive years.

Institutional and Insider Ownership

61.3% of Capital Trust shares are owned by institutional investors. Comparatively, 36.1% of New York Mortgage Trust shares are owned by institutional investors. 0.9% of Capital Trust shares are owned by insiders. Comparatively, 1.3% of New York Mortgage Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Capital Trust and New York Mortgage Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Capital Trust $298.97 million 9.98 $220.95 million $2.33 13.50
New York Mortgage Trust $107.14 million 6.56 $57.06 million $0.51 12.31

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Capital Trust and New York Mortgage Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Capital Trust 0 3 3 0 2.50
New York Mortgage Trust 0 4 1 0 2.20

Capital Trust currently has a consensus target price of $33.50, indicating a potential upside of 6.48%. New York Mortgage Trust has a consensus target price of $6.33, indicating a potential upside of 0.85%. Given Capital Trust’s stronger consensus rating and higher possible upside, equities analysts clearly believe Capital Trust is more favorable than New York Mortgage Trust.

Volatility & Risk

Capital Trust has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, New York Mortgage Trust has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500.

Profitability

This table compares Capital Trust and New York Mortgage Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Capital Trust 55.05% 8.76% 2.43%
New York Mortgage Trust 19.62% 10.05% 0.71%

Summary

Capital Trust beats New York Mortgage Trust on 13 of the 17 factors compared between the two stocks.

Capital Trust Company Profile

Blackstone Mortgage Trust, Inc. is a holding company. The Company conducts its operations as a real estate investment trust for the United States federal income tax purposes. The Company originates and purchases senior loans collateralized by properties in North America and Europe. The Company’s business is focused on originating or acquiring senior, floating rate mortgage loans that are secured by a first priority mortgage on commercial real estate assets primarily in the office, lodging, retail, residential and industrial sectors. These investments may be in the form of whole loans or may also include pari passu participations within mortgage loans. It directly originates, co-originates and acquires debt instruments in conjunction with acquisitions, refinancings and recapitalizations of commercial real estate. The Company’s manager is BXMT Advisors L.L.C.

New York Mortgage Trust Company Profile

New York Mortgage Trust, Inc. is a real estate investment trust (REIT). The Company is engaged in the business of acquiring, investing in, financing and managing primarily mortgage-related assets and financial assets. The Company’s investment portfolio includes residential mortgage loans, including second mortgages and loans sourced from distressed markets, non-agency residential mortgage-backed securities (RMBS), multi-family commercial mortgage-backed securities, preferred equity and joint venture equity investments in, and mezzanine loans to, owners of multi-family properties, equity and debt securities issued by entities that invest in residential and commercial real estate and agency RMBS. It may acquire and manage various other types of mortgage-related and financial assets, including, without limitation, collateralized mortgage obligations and securities issued by newly originated residential securitizations, including credit sensitive securities from these securitizations.

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