Franklin BSP Realty Trust (NYSE:FBRT) & Rithm Capital (NYSE:RITM) Head to Head Contrast

Rithm Capital (NYSE:RITM) and Franklin BSP Realty Trust (NYSE:FBRT) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Rithm Capital and Franklin BSP Realty Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rithm Capital	0	1	7	0	2.88
Franklin BSP Realty Trust	0	0	4	1	3.20

Rithm Capital currently has a consensus price target of $12.94, suggesting a potential upside of 17.40%. Franklin BSP Realty Trust has a consensus price target of $15.50, suggesting a potential upside of 24.40%. Given Franklin BSP Realty Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Franklin BSP Realty Trust is more favorable than Rithm Capital.

Insider and Institutional Ownership

44.9% of Rithm Capital shares are held by institutional investors. Comparatively, 59.9% of Franklin BSP Realty Trust shares are held by institutional investors. 0.4% of Rithm Capital shares are held by insiders. Comparatively, 0.7% of Franklin BSP Realty Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Rithm Capital has a beta of 1.79, indicating that its share price is 79% more volatile than the S&P 500. Comparatively, Franklin BSP Realty Trust has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500.

Earnings & Valuation

This table compares Rithm Capital and Franklin BSP Realty Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rithm Capital	$2.29 billion	2.50	$622.26 million	$0.99	11.13
Franklin BSP Realty Trust	$548.44 million	1.86	$145.21 million	$0.82	15.20

Rithm Capital has higher revenue and earnings than Franklin BSP Realty Trust. Rithm Capital is trading at a lower price-to-earnings ratio than Franklin BSP Realty Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

Rithm Capital pays an annual dividend of $1.00 per share and has a dividend yield of 9.1%. Franklin BSP Realty Trust pays an annual dividend of $1.42 per share and has a dividend yield of 11.4%. Rithm Capital pays out 101.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Franklin BSP Realty Trust pays out 173.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Rithm Capital and Franklin BSP Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rithm Capital	14.99%	17.54%	2.50%
Franklin BSP Realty Trust	45.58%	8.92%	1.89%

Summary

Rithm Capital beats Franklin BSP Realty Trust on 9 of the 17 factors compared between the two stocks.

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.

About Franklin BSP Realty Trust

Benefit Street Partners operates as a self-managed real estate investment trust (REIT). BSP earns income from investing in a leveraged portfolio of residential mortgage pass-through securities consisting almost exclusively of adjustable-rate mortgage (ARM) securities issued and guaranteed by government-sponsored enterprises, either Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac) (together, the government-sponsored enterprises (GSEs)), or by an agency of the federal government, Government National Mortgage Association (Ginnie Mae). BSP’s investment strategy focuses on managing a portfolio of residential mortgage investments consisting almost exclusively of ARM Agency Securities. As of December 31, 2012, the Company’s securities consisted of Agency Securities classified as available-for-sale and Residential mortgage securities classified as held-to-maturity.