Analyzing TPG RE Finance Trust (TRTX) & Stonegate Mortgage (NYSE:SGM)

TPG RE Finance Trust (NYSE: TRTX) and Stonegate Mortgage (NYSE:SGM) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, profitability, risk and dividends.

Earnings and Valuation

This table compares TPG RE Finance Trust and Stonegate Mortgage’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TPG RE Finance Trust $92.39 million 12.18 $69.96 million N/A N/A
Stonegate Mortgage N/A N/A N/A $1.16 6.89

TPG RE Finance Trust has higher revenue and earnings than Stonegate Mortgage.

Institutional & Insider Ownership

26.4% of TPG RE Finance Trust shares are owned by institutional investors. Comparatively, 44.3% of Stonegate Mortgage shares are owned by institutional investors. 44.5% of Stonegate Mortgage shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for TPG RE Finance Trust and Stonegate Mortgage, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TPG RE Finance Trust 0 2 3 0 2.60
Stonegate Mortgage 0 0 0 0 N/A

TPG RE Finance Trust currently has a consensus target price of $21.20, indicating a potential upside of 12.35%. Given TPG RE Finance Trust’s higher possible upside, equities analysts plainly believe TPG RE Finance Trust is more favorable than Stonegate Mortgage.

Profitability

This table compares TPG RE Finance Trust and Stonegate Mortgage’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TPG RE Finance Trust N/A N/A N/A
Stonegate Mortgage -13.22% -6.70% -1.57%

Dividends

TPG RE Finance Trust pays an annual dividend of $0.71 per share and has a dividend yield of 3.8%. Stonegate Mortgage does not pay a dividend.

Summary

TPG RE Finance Trust beats Stonegate Mortgage on 7 of the 9 factors compared between the two stocks.

About TPG RE Finance Trust

TPG RE Finance Trust, Inc. is a commercial real estate finance company. The Company is engaged in originating, acquiring and managing commercial mortgage loans and other commercial real estate-related debt instruments. It focuses primarily on directly originating and selectively acquiring floating rate first mortgage loans that are secured by high quality commercial real estate properties undergoing some form of transition and value creation, such as re-tenanting, refurbishment or other form of repositioning. As of December 31, 2016, the Company’s portfolio consisted of 54 first mortgage loans. As of December 31, 2016, 97% of the loan commitments in its portfolio consisted of floating rate loans, and 98.6% of the loan commitments in its portfolio consisted of first mortgage loans.

About Stonegate Mortgage

Stonegate Mortgage Corporation is a non-bank mortgage company. The Company is focused on originating, financing and servicing the United States residential mortgage loans. The Company’s segments include Originations, Servicing, Financing and Other. The Originations segment primarily originates and sells residential mortgage loans, which conform to the underwriting guidelines of the government sponsored enterprises and government agencies, and non-agency whole loan investors. The Servicing segment includes loan administration, collection and default activities, including the collection and remittance of loan payments, responding to customer inquiries, collection of principal and interest payments, holding custodial funds for the payment of property taxes and insurance premiums, counseling delinquent mortgagors and modifying loans. The Financing segment includes warehouse-lending activities to correspondent customers by the Company’s subsidiary, NattyMac, LLC.

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