Contrasting Blackstone Mortgage Trust (NYSE:BXMT) & Rithm Capital (NYSE:RITM)

Rithm Capital (NYSE:RITM) and Blackstone Mortgage Trust (NYSE:BXMT) are both mid-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, institutional ownership, valuation, analyst recommendations and risk.

Institutional and Insider Ownership

44.9% of Rithm Capital shares are owned by institutional investors. Comparatively, 64.2% of Blackstone Mortgage Trust shares are owned by institutional investors. 0.6% of Rithm Capital shares are owned by company insiders. Comparatively, 1.2% of Blackstone Mortgage Trust shares are owned by company 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rithm Capital	9.20%	19.86%	2.84%
Blackstone Mortgage Trust	1.57%	7.72%	1.35%

Dividends

Rithm Capital pays an annual dividend of $1.00 per share and has a dividend yield of 9.7%. Blackstone Mortgage Trust pays an annual dividend of $1.88 per share and has a dividend yield of 13.2%. Rithm Capital pays out 166.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blackstone Mortgage Trust pays out 2,088.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Rithm Capital has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Blackstone Mortgage Trust has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500.

Valuation and Earnings

This table compares Rithm Capital and Blackstone Mortgage Trust”s top-line 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	1.25	$681.45 million	$0.60	17.12
Blackstone Mortgage Trust	$1.36 billion	1.77	$109.57 million	$0.09	158.44

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rithm Capital	1	0	10	0	2.82
Blackstone Mortgage Trust	2	2	4	0	2.25

Rithm Capital currently has a consensus target price of $13.20, suggesting a potential upside of 28.53%. Blackstone Mortgage Trust has a consensus target price of $19.20, suggesting a potential upside of 34.64%. Given Blackstone Mortgage Trust’s higher probable upside, analysts clearly believe Blackstone Mortgage Trust is more favorable than Rithm Capital.

Summary

Rithm Capital beats Blackstone Mortgage Trust on 10 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 Blackstone Mortgage Trust

Blackstone Mortgage Trust, Inc., a real estate finance company, originates senior loans collateralized by commercial properties in North America, Europe, and Australia. The company originates and acquires senior floating rate mortgage loans that are secured by a first-priority mortgage on commercial real estate assets. It operates as a real estate investment trust for federal income tax purposes. The company was formerly known as Capital Trust, Inc. and changed its name to Blackstone Mortgage Trust, Inc. in May 2013. Blackstone Mortgage Trust, Inc. was incorporated in 1998 and is headquartered in New York, New York.