Starwood Property Trust (NYSE:STWD) versus Angel Oak Mortgage REIT (NYSE:AOMR) Critical Comparison

Angel Oak Mortgage REIT (NYSE:AOMR) and Starwood Property Trust (NYSE:STWD) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, dividends, analyst recommendations, risk and valuation.

Dividends

Angel Oak Mortgage REIT pays an annual dividend of $1.28 per share and has a dividend yield of 14.2%. Starwood Property Trust pays an annual dividend of $1.92 per share and has a dividend yield of 10.4%. 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. Starwood Property Trust pays out 176.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

80.2% of Angel Oak Mortgage REIT shares are owned by institutional investors. Comparatively, 49.8% of Starwood Property Trust shares are owned by institutional investors. 2.9% of Angel Oak Mortgage REIT shares are owned by insiders. Comparatively, 5.4% of Starwood Property Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Angel Oak Mortgage REIT and Starwood Property Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Angel Oak Mortgage REIT	$34.71 million	6.18	$28.75 million	$0.71	12.71
Starwood Property Trust	$797.72 million	8.47	$359.93 million	$1.09	16.89

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

Risk and Volatility

Angel Oak Mortgage REIT has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500. Comparatively, Starwood Property Trust has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Angel Oak Mortgage REIT and Starwood Property Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Angel Oak Mortgage REIT	1	2	4	0	2.43
Starwood Property Trust	1	2	2	0	2.20

Angel Oak Mortgage REIT currently has a consensus price target of $11.60, indicating a potential upside of 28.53%. Starwood Property Trust has a consensus price target of $20.50, indicating a potential upside of 11.38%. Given Angel Oak Mortgage REIT’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Angel Oak Mortgage REIT is more favorable than Starwood Property Trust.

Profitability

This table compares Angel Oak Mortgage REIT and Starwood Property Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Angel Oak Mortgage REIT	12.93%	6.42%	0.63%
Starwood Property Trust	20.58%	8.72%	0.94%

Summary

Starwood Property Trust beats Angel Oak Mortgage REIT on 10 of the 16 factors compared between the two stocks.

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.

About Starwood Property Trust

Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States and internationally. The company operates through Commercial and Residential Lending, Infrastructure Lending, Property, and Investing and Servicing segments. The Commercial and Residential Lending segment originates, acquires, finances, and manages commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), and residential mortgage-backed securities, as well as other real estate and real estate-related debt investments, include distressed or non-performing loans. The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments. The Property segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment. The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets that include properties acquired from CMBS trusts. The company qualifies as a REIT for federal income tax purposes and 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 2009 and is headquartered in Greenwich, Connecticut.