Invesco Mortgage Capital (NYSE:IVR – Get Free Report) and Peakstone Realty Trust (NYSE:PKST – Get Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.
Insider and Institutional Ownership
40.5% of Invesco Mortgage Capital shares are held by institutional investors. Comparatively, 39.0% of Peakstone Realty Trust shares are held by institutional investors. 0.2% of Invesco Mortgage Capital shares are held by company insiders. Comparatively, 0.5% of Peakstone 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.
Dividends
Invesco Mortgage Capital pays an annual dividend of $1.36 per share and has a dividend yield of 21.5%. Peakstone Realty Trust pays an annual dividend of $0.90 per share and has a dividend yield of 7.9%. Invesco Mortgage Capital pays out 209.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Peakstone Realty Trust pays out -321.4% of its earnings in the form of a dividend.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Invesco Mortgage Capital | 0 | 1 | 1 | 0 | 2.50 |
| Peakstone Realty Trust | 0 | 1 | 0 | 1 | 3.00 |
Invesco Mortgage Capital currently has a consensus target price of $10.00, suggesting a potential upside of 57.85%. Peakstone Realty Trust has a consensus target price of $15.00, suggesting a potential upside of 31.57%. Given Invesco Mortgage Capital’s higher probable upside, analysts plainly believe Invesco Mortgage Capital is more favorable than Peakstone Realty Trust.
Profitability
This table compares Invesco Mortgage Capital and Peakstone Realty Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Invesco Mortgage Capital | 20.90% | 34.61% | 3.29% |
| Peakstone Realty Trust | -4.38% | -0.85% | -0.38% |
Earnings and Valuation
This table compares Invesco Mortgage Capital and Peakstone Realty Trust”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Invesco Mortgage Capital | $79.55 million | 5.20 | -$15.86 million | $0.65 | 9.75 |
| Peakstone Realty Trust | $228.07 million | 1.84 | -$550.58 million | ($0.28) | -40.72 |
Invesco Mortgage Capital has higher earnings, but lower revenue than Peakstone Realty Trust. Peakstone Realty Trust is trading at a lower price-to-earnings ratio than Invesco Mortgage Capital, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Invesco Mortgage Capital has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500. Comparatively, Peakstone Realty Trust has a beta of 1.7, indicating that its share price is 70% more volatile than the S&P 500.
Summary
Invesco Mortgage Capital beats Peakstone Realty Trust on 11 of the 17 factors compared between the two stocks.
About Invesco Mortgage Capital
Invesco Mortgage Capital Inc. operates as a real estate investment trust (REIT) that invests, finances, and manages mortgage-backed securities and other mortgage-related assets in the United States. It invests in residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities (CMBS) that are guaranteed by a U.S. government agency or federally chartered corporation; RMBS and CMBS that are not issued or guaranteed by the United States government agency or federally chartered corporation; the United States treasury securities; real estate-related financing arrangements; to-be-announced securities forward contracts to purchase RMBS; and commercial mortgage loans. It has elected to be taxed as a REIT and would be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was incorporated in 2008 and is headquartered in Atlanta, Georgia.
About Peakstone Realty Trust
Peakstone Realty Trust (NYSE: PKST) is an internally managed, real estate investment trust (REIT) that owns and operates a high-quality, newer-vintage portfolio of predominantly single-tenant industrial and office properties. These assets are generally leased to creditworthy tenants under long-term net lease agreements with contractual rent escalations. As of March 31, 2023, Peakstone's wholly-owned portfolio consists of 19 million square feet across 24 states in primarily high-growth, strategic coastal and sunbelt markets.
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