Financial Analysis: Franklin BSP Realty Trust (NYSE:FBRT) vs. BRT Apartments (NYSE:BRT)

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Franklin BSP Realty Trust and BRT Apartments, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin BSP Realty Trust	0	0	3	1	3.25
BRT Apartments	0	0	2	0	3.00

Franklin BSP Realty Trust currently has a consensus price target of $15.25, suggesting a potential upside of 12.05%. BRT Apartments has a consensus price target of $22.25, suggesting a potential upside of 20.14%. Given BRT Apartments’ higher possible upside, analysts plainly believe BRT Apartments is more favorable than Franklin BSP Realty Trust.

Insider & Institutional Ownership

59.9% of Franklin BSP Realty Trust shares are held by institutional investors. Comparatively, 29.1% of BRT Apartments shares are held by institutional investors. 0.7% of Franklin BSP Realty Trust shares are held by insiders. Comparatively, 40.2% of BRT Apartments shares are held 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.

Risk and Volatility

Franklin BSP Realty Trust has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500. Comparatively, BRT Apartments has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Earnings & Valuation

This table compares Franklin BSP Realty Trust and BRT Apartments’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin BSP Realty Trust	$263.95 million	4.22	$145.21 million	$1.32	10.31
BRT Apartments	$93.62 million	3.69	$3.87 million	$0.22	84.19

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

Dividends

Franklin BSP Realty Trust pays an annual dividend of $1.42 per share and has a dividend yield of 10.4%. BRT Apartments pays an annual dividend of $1.00 per share and has a dividend yield of 5.4%. Franklin BSP Realty Trust pays out 107.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BRT Apartments pays out 454.6% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Franklin BSP Realty Trust and BRT Apartments’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin BSP Realty Trust	53.82%	14.32%	3.20%
BRT Apartments	5.10%	2.06%	0.67%

Summary

Franklin BSP Realty Trust beats BRT Apartments on 14 of the 17 factors compared between the two stocks.

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.

About BRT Apartments

BRT is a real estate investment trust that owns, operates and, to a lesser extent, holds interests in joint ventures that own multi-family properties. As of December 31, 2023, BRT owns or has interests in 28 multi-family properties with 7,707 units in 11 states.