Granite Point Mortgage Trust (NYSE:GPMT) and Orchid Island Capital (NYSE:ORC) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, institutional ownership, earnings, profitability, risk and analyst recommendations.

Profitability

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

Net Margins Return on Equity Return on Assets
Granite Point Mortgage Trust 36.50% 6.87% 2.27%
Orchid Island Capital N/A 20.14% 2.13%

Dividends

Granite Point Mortgage Trust pays an annual dividend of $1.68 per share and has a dividend yield of 9.0%. Orchid Island Capital pays an annual dividend of $0.96 per share and has a dividend yield of 14.0%. Orchid Island Capital pays out 114.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current ratings for Granite Point Mortgage Trust and Orchid Island Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Granite Point Mortgage Trust 0 4 1 1 2.50
Orchid Island Capital 0 0 0 0 N/A

Granite Point Mortgage Trust presently has a consensus price target of $19.40, suggesting a potential upside of 4.47%. Given Granite Point Mortgage Trust’s higher possible upside, equities research analysts clearly believe Granite Point Mortgage Trust is more favorable than Orchid Island Capital.

Earnings & Valuation

This table compares Granite Point Mortgage Trust and Orchid Island Capital’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Granite Point Mortgage Trust $75.37 million 10.71 $53.30 million N/A N/A
Orchid Island Capital $145.96 million 2.45 $2.00 million $0.84 8.19

Granite Point Mortgage Trust has higher earnings, but lower revenue than Orchid Island Capital.

Insider & Institutional Ownership

65.2% of Granite Point Mortgage Trust shares are held by institutional investors. Comparatively, 33.1% of Orchid Island Capital shares are held by institutional investors. 2.1% of Granite Point Mortgage Trust shares are held by insiders. Comparatively, 0.3% of Orchid Island Capital shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Granite Point Mortgage Trust has a beta of 0.06, indicating that its stock price is 94% less volatile than the S&P 500. Comparatively, Orchid Island Capital has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500.

Summary

Granite Point Mortgage Trust beats Orchid Island Capital on 11 of the 15 factors compared between the two stocks.

About Granite Point Mortgage Trust

Granite Point Mortgage Trust Inc. 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. As of December 31, 2017, its investment portfolio includes 61 commercial real estate debt investments. The company intends to qualify as a real estate investment trust for federal income tax purposes. The company was founded in 2015 and is headquartered in New York, New York.

About Orchid Island Capital

Orchid Island Capital, Inc., a specialty finance company, invests in residential mortgage-backed securities (RMBS) in the United States. The company's RMBS are backed primarily by single-family residential mortgage loans, referred as Agency RMBS. Its portfolio includes traditional pass-through Agency RMBS; and structured Agency RMBS, including collateralized mortgage obligations, interest only securities, inverse interest only securities, and principal only securities. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2010 and is headquartered in Vero Beach, Florida.

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