Contrasting AG Mortgage Investment Trust (NYSE:MITT) and Rithm Capital (NYSE:RITM)

AG Mortgage Investment Trust (NYSE:MITT) and Rithm Capital (NYSE:RITM) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, dividends, analyst recommendations and risk.

Risk & Volatility

AG Mortgage Investment Trust has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500. Comparatively, Rithm Capital has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500.

Dividends

AG Mortgage Investment Trust pays an annual dividend of $0.80 per share and has a dividend yield of 11.8%. Rithm Capital pays an annual dividend of $1.00 per share and has a dividend yield of 8.9%. AG Mortgage Investment Trust pays out 65.0% of its earnings in the form of a dividend. Rithm Capital pays out 83.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AG Mortgage Investment Trust has increased its dividend for 2 consecutive years. AG Mortgage Investment Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares AG Mortgage Investment Trust and Rithm Capital”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AG Mortgage Investment Trust	$75.32 million	2.67	$53.78 million	$1.23	5.51
Rithm Capital	$2.73 billion	2.19	$931.50 million	$1.20	9.40

Rithm Capital has higher revenue and earnings than AG Mortgage Investment Trust. AG Mortgage Investment Trust is trading at a lower price-to-earnings ratio than Rithm Capital, 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 AG Mortgage Investment Trust and Rithm Capital, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AG Mortgage Investment Trust	0	1	3	0	2.75
Rithm Capital	0	0	8	1	3.11

AG Mortgage Investment Trust presently has a consensus target price of $8.25, indicating a potential upside of 21.68%. Rithm Capital has a consensus target price of $13.61, indicating a potential upside of 20.72%. Given AG Mortgage Investment Trust’s higher possible upside, equities research analysts plainly believe AG Mortgage Investment Trust is more favorable than Rithm Capital.

Insider and Institutional Ownership

27.3% of AG Mortgage Investment Trust shares are owned by institutional investors. Comparatively, 44.9% of Rithm Capital shares are owned by institutional investors. 3.8% of AG Mortgage Investment Trust shares are owned by company insiders. Comparatively, 0.4% of Rithm Capital shares are owned 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AG Mortgage Investment Trust	20.19%	9.70%	0.46%
Rithm Capital	17.79%	18.15%	2.57%

About AG Mortgage Investment Trust

AG Mortgage Investment Trust, Inc. operates as a residential mortgage real estate investment trust in the United States. Its investment portfolio includes residential investments, including non-agency loans, agency-eligible loans, re-and non-performing loans, and non-agency residential mortgage-backed securities, as well as commercial loans and commercial mortgage-backed securities. 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. AG Mortgage Investment Trust, Inc. was incorporated in 2011 and is based in New York, New York.

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.