Contrasting Franklin BSP Realty Trust (NYSE:FBRT) and Sunrise Realty Trust (NASDAQ:SUNS)

Sunrise Realty Trust (NASDAQ:SUNS) and Franklin BSP Realty Trust (NYSE:FBRT) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Profitability

This table compares Sunrise Realty Trust and Franklin BSP Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sunrise Realty Trust	53.33%	8.24%	5.03%
Franklin BSP Realty Trust	20.49%	5.82%	1.17%

Institutional and Insider Ownership

59.9% of Franklin BSP Realty Trust shares are held by institutional investors. 28.5% of Sunrise Realty Trust shares are held by company insiders. Comparatively, 1.3% of Franklin BSP Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Sunrise Realty Trust has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Franklin BSP Realty Trust has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Sunrise Realty Trust and Franklin BSP Realty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sunrise Realty Trust	1	2	0	0	1.67
Franklin BSP Realty Trust	1	1	3	0	2.40

Sunrise Realty Trust currently has a consensus price target of $8.00, suggesting a potential upside of 6.81%. Franklin BSP Realty Trust has a consensus price target of $11.50, suggesting a potential upside of 44.38%. Given Franklin BSP Realty Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Franklin BSP Realty Trust is more favorable than Sunrise Realty Trust.

Valuation and Earnings

This table compares Sunrise Realty Trust and Franklin BSP Realty Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sunrise Realty Trust	$21.57 million	4.69	$12.14 million	$0.97	7.72
Franklin BSP Realty Trust	$270.07 million	2.45	$82.27 million	$0.44	18.10

Franklin BSP Realty Trust has higher revenue and earnings than Sunrise Realty Trust. Sunrise Realty Trust is trading at a lower price-to-earnings ratio than Franklin BSP Realty Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

Sunrise Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 16.0%. Franklin BSP Realty Trust pays an annual dividend of $0.80 per share and has a dividend yield of 10.0%. Sunrise Realty Trust pays out 123.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Franklin BSP Realty Trust pays out 181.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sunrise Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Sunrise Realty Trust beats Franklin BSP Realty Trust on 9 of the 16 factors compared between the two stocks.

About Sunrise Realty Trust

Sunrise Realty Trust, Inc. engages in commercial real estate (CRE) lending business. It focuses on originating CRE debt investments and providing capital to borrowers and sponsors with transitional business plans collateralized by CRE assets. The company intends to create a diversified investment portfolio, targeting investments in senior mortgage loans, mezzanine loans, whole loans, B-notes, CMBS, and debt-like preferred equity securities across CRE asset classes. Sunrise Realty Trust, Inc. was incorporated in 2023 and is based in West Palm Beach, Florida.

About Franklin BSP Realty Trust

Benefit Street Partners operates as a self-managed real estate investment trust (REIT). BSP earns income from investing in a leveraged portfolio of residential mortgage pass-through securities consisting almost exclusively of adjustable-rate mortgage (ARM) securities issued and guaranteed by government-sponsored enterprises, either Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac) (together, the government-sponsored enterprises (GSEs)), or by an agency of the federal government, Government National Mortgage Association (Ginnie Mae). BSP’s investment strategy focuses on managing a portfolio of residential mortgage investments consisting almost exclusively of ARM Agency Securities. As of December 31, 2012, the Company’s securities consisted of Agency Securities classified as available-for-sale and Residential mortgage securities classified as held-to-maturity.