Comparing Arbor Realty Trust (NYSE:ABR) & Blackstone Mortgage Trust (NYSE:BXMT)

Blackstone Mortgage Trust (NYSE:BXMT) and Arbor Realty Trust (NYSE:ABR) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, profitability, risk and analyst recommendations.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Blackstone Mortgage Trust and Arbor Realty Trust, 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
Arbor Realty Trust	2	4	1	0	1.86

Blackstone Mortgage Trust currently has a consensus price target of $20.25, indicating a potential upside of 1.73%. Arbor Realty Trust has a consensus price target of $10.75, indicating a potential upside of 21.40%. Given Arbor Realty Trust’s higher possible upside, analysts plainly believe Arbor Realty Trust is more favorable than Blackstone Mortgage Trust.

Volatility & Risk

Blackstone Mortgage Trust has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, Arbor Realty Trust has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500.

Earnings & Valuation

This table compares Blackstone Mortgage Trust and Arbor Realty Trust”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	1.89	-$204.09 million	$0.62	32.10
Arbor Realty Trust	$1.17 billion	1.48	$264.64 million	$0.80	11.07

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Blackstone Mortgage Trust	7.53%	4.06%	0.75%
Arbor Realty Trust	20.07%	11.63%	2.13%

Institutional and Insider Ownership

64.2% of Blackstone Mortgage Trust shares are held by institutional investors. Comparatively, 57.3% of Arbor Realty Trust shares are held by institutional investors. 1.0% of Blackstone Mortgage Trust shares are held by insiders. Comparatively, 3.8% of Arbor Realty Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Blackstone Mortgage Trust pays an annual dividend of $1.88 per share and has a dividend yield of 9.4%. Arbor Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 13.6%. Blackstone Mortgage Trust pays out 303.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Arbor Realty Trust pays out 150.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Arbor Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Arbor Realty Trust beats Blackstone Mortgage Trust on 10 of the 16 factors compared between the two stocks.

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 Arbor Realty Trust

Arbor Realty Trust, Inc. invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States. The company operates through Structured Business and Agency Business segments. It primarily invests in bridge and mezzanine loans, including junior participating interests in first mortgages, and preferred and direct equity, as well as real estate-related joint ventures, real estate-related notes, and various mortgage-related securities. In addition, the company offers bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property; financing by making preferred equity investments in entities that directly or indirectly own real property; mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction; junior participation financing in the form of a junior participating interest in the senior debt; and financing products to borrowers who are looking to acquire conventional, workforce, and affordable single-family housing. Further, it underwrites, originates, sells, and services multifamily mortgage loans through conduit/commercial mortgage-backed securities programs. 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. Arbor Realty Trust, Inc. was incorporated in 2003 and is headquartered in Uniondale, New York.