LTC Properties (NYSE:LTC) and PennyMac Mortgage Investment Trust (NYSE:PMT) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.
Valuation and Earnings
This table compares LTC Properties 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|
|LTC Properties||$168.65 million||10.78||$154.98 million||$3.06||14.95|
|PennyMac Mortgage Investment Trust||$351.07 million||4.26||$152.80 million||$1.99||10.99|
Risk and Volatility
LTC Properties has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500. Comparatively, PennyMac Mortgage Investment Trust has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500.
LTC Properties pays an annual dividend of $2.28 per share and has a dividend yield of 5.0%. PennyMac Mortgage Investment Trust pays an annual dividend of $1.88 per share and has a dividend yield of 8.6%. LTC Properties pays out 74.5% of its earnings in the form of a dividend. PennyMac Mortgage Investment Trust pays out 94.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This is a summary of recent ratings and recommmendations for LTC Properties and PennyMac Mortgage Investment Trust, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|PennyMac Mortgage Investment Trust||0||2||5||0||2.71|
LTC Properties currently has a consensus target price of $42.25, suggesting a potential downside of 7.65%. PennyMac Mortgage Investment Trust has a consensus target price of $21.86, suggesting a potential downside of 0.06%. Given PennyMac Mortgage Investment Trust’s stronger consensus rating and higher possible upside, analysts plainly believe PennyMac Mortgage Investment Trust is more favorable than LTC Properties.
Insider and Institutional Ownership
76.0% of LTC Properties shares are held by institutional investors. Comparatively, 71.6% of PennyMac Mortgage Investment Trust shares are held by institutional investors. 1.6% of LTC Properties shares are held by company insiders. Comparatively, 2.5% of PennyMac Mortgage Investment Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This table compares LTC Properties and PennyMac Mortgage Investment Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|PennyMac Mortgage Investment Trust||46.63%||13.71%||2.43%|
LTC Properties beats PennyMac Mortgage Investment Trust on 9 of the 16 factors compared between the two stocks.
LTC Properties Company Profile
LTC is a real estate investment trust (REIT) investing in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint-ventures and structured finance solutions including preferred equity and mezzanine lending. LTC holds more than 200 investments in 28 states with 30 operating partners. The portfolio is comprised of approximately 50% seniors housing and 50% skilled nursing properties.
PennyMac Mortgage Investment Trust Company Profile
PennyMac Mortgage Investment Trust, a specialty finance company, invests primarily in residential mortgage loans and mortgage-related assets in the United States. The company's Correspondent Production segment engages in purchasing, pooling, and reselling newly originated prime credit mortgage loans directly or in the form of mortgage-backed securities (MBS). Its Credit Sensitive Strategies segment invests in credit risk transfer (CRT) agreements, firm commitment to purchase CRT securities, distressed mortgage loans, real estate acquired in settlement of mortgage loans, non-Agency subordinated bonds, and small balance commercial real estate mortgage loans. 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; and interest rate hedging activities related to indebtedness. PNMAC Capital Management, LLC acts as the manager of PennyMac Mortgage Investment Trust. 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 founded in 2009 and is based in Westlake Village, California.
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