Comparing Invesco Mortgage Capital (NYSE:IVR) & Blackstone Mortgage Trust (NYSE:BXMT)

Blackstone Mortgage Trust (NYSE:BXMT) and Invesco Mortgage Capital (NYSE:IVR) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, profitability, institutional ownership and earnings.

Dividends

Blackstone Mortgage Trust pays an annual dividend of $1.88 per share and has a dividend yield of 10.0%. Invesco Mortgage Capital pays an annual dividend of $1.36 per share and has a dividend yield of 17.8%. Blackstone Mortgage Trust pays out -2,685.7% of its earnings in the form of a dividend. Invesco Mortgage Capital pays out 340.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of current ratings for Blackstone Mortgage Trust and Invesco Mortgage Capital, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blackstone Mortgage Trust	0	4	2	0	2.33
Invesco Mortgage Capital	0	3	0	0	2.00

Blackstone Mortgage Trust presently has a consensus price target of $20.00, suggesting a potential upside of 6.16%. Invesco Mortgage Capital has a consensus price target of $7.25, suggesting a potential downside of 5.35%. Given Blackstone Mortgage Trust’s stronger consensus rating and higher possible upside, research analysts clearly believe Blackstone Mortgage Trust is more favorable than Invesco Mortgage Capital.

Earnings & Valuation

This table compares Blackstone Mortgage Trust and Invesco Mortgage Capital”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blackstone Mortgage Trust	$1.77 billion	1.83	-$204.09 million	($0.07)	-269.14
Invesco Mortgage Capital	$286.55 million	1.77	$59.88 million	$0.40	19.15

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

Institutional & Insider Ownership

64.2% of Blackstone Mortgage Trust shares are owned by institutional investors. Comparatively, 40.5% of Invesco Mortgage Capital shares are owned by institutional investors. 1.0% of Blackstone Mortgage Trust shares are owned by company insiders. Comparatively, 0.2% of Invesco Mortgage Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Blackstone Mortgage Trust and Invesco Mortgage Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Blackstone Mortgage Trust	-0.83%	5.17%	0.95%
Invesco Mortgage Capital	13.77%	30.04%	2.91%

Volatility & Risk

Blackstone Mortgage Trust has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500. Comparatively, Invesco Mortgage Capital has a beta of 1.7, indicating that its stock price is 70% more volatile than the S&P 500.

About Blackstone Mortgage Trust

Blackstone Mortgage Trust, Inc., a real estate finance company, originates senior loans collateralized by commercial properties in North America, Europe, and Australia. The company originates and acquires senior floating rate mortgage loans that are secured by a first-priority mortgage on commercial real estate assets. It operates as a real estate investment trust for federal income tax purposes. The company was formerly known as Capital Trust, Inc. and changed its name to Blackstone Mortgage Trust, Inc. in May 2013. Blackstone Mortgage Trust, Inc. was incorporated in 1998 and is headquartered in New York, New York.

About Invesco Mortgage Capital

Invesco Mortgage Capital Inc. operates as a real estate investment trust (REIT) that invests, finances, and manages mortgage-backed securities and other mortgage-related assets in the United States. It invests in residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities (CMBS) that are guaranteed by a U.S. government agency or federally chartered corporation; RMBS and CMBS that are not issued or guaranteed by the United States government agency or federally chartered corporation; the United States treasury securities; real estate-related financing arrangements; to-be-announced securities forward contracts to purchase RMBS; and commercial mortgage loans. It has elected to be taxed as a REIT and would 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 2008 and is headquartered in Atlanta, Georgia.