Critical Analysis: Granite Point Mortgage Trust (GPMT) and Dynex Capital (DX)
Granite Point Mortgage Trust (NASDAQ: GPMT) and Dynex Capital (NYSE:DX) are both small-cap financials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, earnings, valuation, profitability and dividends.
Dynex Capital pays an annual dividend of $0.72 per share and has a dividend yield of 10.1%. Granite Point Mortgage Trust does not pay a dividend. Dynex Capital pays out 46.8% of its earnings in the form of a dividend.
Valuation & Earnings
This table compares Granite Point Mortgage Trust and Dynex Capital’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Granite Point Mortgage Trust||N/A||N/A||N/A||N/A||N/A|
|Dynex Capital||$105.39 million||3.34||$75.82 million||$1.54||4.64|
Dynex Capital has higher revenue and earnings than Granite Point Mortgage Trust.
Institutional & Insider Ownership
44.4% of Dynex Capital shares are held by institutional investors. 7.1% of Dynex Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This table compares Granite Point Mortgage Trust and Dynex Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Granite Point Mortgage Trust||54.39%||8.94%||3.09%|
This is a breakdown of recent recommendations and price targets for Granite Point Mortgage Trust and Dynex Capital, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Granite Point Mortgage Trust||0||2||2||0||2.50|
Granite Point Mortgage Trust currently has a consensus target price of $20.00, indicating a potential upside of 4.88%. Dynex Capital has a consensus target price of $7.00, indicating a potential downside of 2.10%. Given Granite Point Mortgage Trust’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Granite Point Mortgage Trust is more favorable than Dynex Capital.
Dynex Capital beats Granite Point Mortgage Trust on 6 of the 11 factors compared between the two stocks.
Granite Point Mortgage Trust Company Profile
Granite Point Mortgage Trust Inc. is focused primarily on directly originating, investing in and managing senior floating-rate commercial mortgage loans and other debt, such as commercial real estate investments. The Company formed to continue and expand the commercial real estate lending business. The Company is a long-term, fundamental value-oriented investor. The Company constructs its own investment portfolio on a loan-by-loan basis, emphasizing rigorous credit underwriting, selectivity and diversification available in the market. The Company provides intermediate-term bridge or transitional financing for a variety of purposes, including acquisitions, recapitalizations, refinancing and a range of business plans including lease-up, renovation, repositioning and repurposing of the property. It generally targets the top 25-50, metropolitan statistical areas (MSA) in the United States.
Dynex Capital Company Profile
Dynex Capital, Inc. is an internally managed mortgage real estate investment trust, which invests in residential and commercial mortgage securities on a leveraged basis. The Company’s objective is to provide attractive risk-adjusted returns to its shareholders over the long term that is reflective of a leveraged fixed income portfolio with a focus on capital preservation. It seeks to provide returns to its shareholders through regular quarterly dividends and through capital appreciation. It invests in Agency and non-Agency mortgage-backed securities (MBS). MBS consists of residential MBS (RMBS), commercial MBS (CMBS) and CMBS interest-only securities. Agency MBS have a guaranty of principal payment by an agency of the United States Government or a government-sponsored entity (GSE), such as Fannie Mae and Freddie Mac.
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