Financial Review: BrightSpire Capital (NYSE:BRSP) and PennyMac Mortgage Investment Trust (NYSE:PMT)

BrightSpire Capital (NYSE:BRSP) and PennyMac Mortgage Investment Trust (NYSE:PMT) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, valuation, earnings and profitability.

Dividends

BrightSpire Capital pays an annual dividend of $0.64 per share and has a dividend yield of 17.7%. PennyMac Mortgage Investment Trust pays an annual dividend of $1.60 per share and has a dividend yield of 23.4%. BrightSpire Capital pays out -278.3% of its earnings in the form of a dividend. PennyMac Mortgage Investment Trust pays out 112.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation and Earnings

This table compares BrightSpire Capital and PennyMac Mortgage Investment Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BrightSpire Capital	$327.94 million	1.40	-$31.15 million	($0.23)	-15.76
PennyMac Mortgage Investment Trust	$203.88 million	2.93	$127.87 million	$1.42	4.82

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

Risk & Volatility

BrightSpire Capital has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500. Comparatively, PennyMac Mortgage Investment Trust has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for BrightSpire Capital and PennyMac Mortgage Investment Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BrightSpire Capital	3	0	6	0	2.33
PennyMac Mortgage Investment Trust	1	5	3	0	2.22

BrightSpire Capital presently has a consensus price target of $6.00, suggesting a potential upside of 65.52%. PennyMac Mortgage Investment Trust has a consensus price target of $10.92, suggesting a potential upside of 59.48%. Given BrightSpire Capital’s stronger consensus rating and higher probable upside, research analysts plainly believe BrightSpire Capital is more favorable than PennyMac Mortgage Investment Trust.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BrightSpire Capital	-20.43%	7.01%	1.80%
PennyMac Mortgage Investment Trust	47.79%	12.50%	0.76%

Insider and Institutional Ownership

56.6% of BrightSpire Capital shares are owned by institutional investors. Comparatively, 67.4% of PennyMac Mortgage Investment Trust shares are owned by institutional investors. 2.8% of BrightSpire Capital shares are owned by company insiders. Comparatively, 1.0% of PennyMac Mortgage Investment Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

About BrightSpire Capital

BrightSpire Capital, Inc. operates as a commercial real estate (CRE) credit real estate investment trust in the United States and Europe. The company operates through Senior and Mezzanine Loans and Preferred Equity; Net Leased and Other Real Estate; and Corporate and Other segments. It focuses on originating, acquiring, financing, and managing a diversified portfolio of CRE debt investments consisting of first mortgage loans, senior loans, debt securities, mezzanine loans, and preferred equity investments, as well as net leased properties. 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 Colony Credit Real Estate, Inc. and changed its name to BrightSpire Capital, Inc. in June 2021. BrightSpire Capital, Inc. was incorporated in 2017 and is headquartered in New York, New York.

About PennyMac Mortgage Investment Trust

PennyMac Mortgage Investment Trust, through its subsidiary, primarily invests in mortgage-related assets in the United States. The company operates through: Credit Sensitive Strategies, Interest Rate Sensitive Strategies, Correspondent Production segments. Its Credit Sensitive Strategies segment invests in credit risk transfer (CRT) agreements, CRT securities, subordinate mortgage-backed securities (MBS), distressed loans, and real estate. The company's Interest Rate Sensitive Strategies segment engages in investing in mortgage servicing rights, excess servicing spreads, and agency and senior non-agency MBS, as well as related interest rate hedging activities. Its Correspondent Production segment is involved in purchasing, pooling, and reselling newly originated prime credit residential loans directly or in the form of MBS. The company primarily sells its loans to government-sponsored entities or PennyMac Loan Services, LLC. 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 shareholders. The company was incorporated in 2009 and is headquartered in Westlake Village, California.