Comparing Angel Oak Mortgage REIT (NYSE:AOMR) and BrightSpire Capital (NYSE:BRSP)

BrightSpire Capital (NYSE:BRSP) and Angel Oak Mortgage REIT (NYSE:AOMR) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

56.6% of BrightSpire Capital shares are held by institutional investors. Comparatively, 80.2% of Angel Oak Mortgage REIT shares are held by institutional investors. 2.4% of BrightSpire Capital shares are held by company insiders. Comparatively, 2.9% of Angel Oak Mortgage REIT 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.

Earnings & Valuation

This table compares BrightSpire Capital and Angel Oak Mortgage REIT”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BrightSpire Capital	$244.77 million	3.10	-$131.98 million	($0.30)	-19.52
Angel Oak Mortgage REIT	$110.43 million	2.01	$28.75 million	$0.71	12.52

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

Profitability

This table compares BrightSpire Capital and Angel Oak Mortgage REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BrightSpire Capital	-26.91%	7.51%	2.16%
Angel Oak Mortgage REIT	12.93%	6.42%	0.63%

Volatility and Risk

BrightSpire Capital has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500. Comparatively, Angel Oak Mortgage REIT has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for BrightSpire Capital and Angel Oak Mortgage REIT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BrightSpire Capital	2	0	5	0	2.43
Angel Oak Mortgage REIT	0	3	3	0	2.50

BrightSpire Capital presently has a consensus target price of $6.54, suggesting a potential upside of 11.73%. Angel Oak Mortgage REIT has a consensus target price of $11.06, suggesting a potential upside of 24.44%. Given Angel Oak Mortgage REIT’s stronger consensus rating and higher possible upside, analysts clearly believe Angel Oak Mortgage REIT is more favorable than BrightSpire Capital.

Dividends

BrightSpire Capital pays an annual dividend of $0.64 per share and has a dividend yield of 10.9%. Angel Oak Mortgage REIT pays an annual dividend of $1.28 per share and has a dividend yield of 14.4%. BrightSpire Capital pays out -213.3% of its earnings in the form of a dividend. Angel Oak Mortgage REIT pays out 180.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Angel Oak Mortgage REIT beats BrightSpire Capital on 9 of the 16 factors compared between the two stocks.

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 Angel Oak Mortgage REIT

Angel Oak Mortgage REIT, Inc., a real estate finance company, focuses on acquiring and investing in first lien non- qualified mortgage loans and other mortgage-related assets in the United States mortgage market. It offers investment securities; residential mortgage loans; and commercial mortgage loans. 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 incorporated in 2018 and is headquartered in Atlanta, Georgia.