Granite Point Mortgage Trust (NYSE:GPMT) vs. American Tower (NYSE:AMT) Critical Analysis

American Tower (NYSE:AMT) and Granite Point Mortgage Trust (NYSE:GPMT) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings for American Tower and Granite Point Mortgage Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Tower	0	3	10	3	3.00
Granite Point Mortgage Trust	0	2	1	0	2.33

American Tower presently has a consensus price target of $225.21, indicating a potential upside of 8.69%. Granite Point Mortgage Trust has a consensus price target of $3.38, indicating a potential upside of 18.63%. Given Granite Point Mortgage Trust’s higher probable upside, analysts plainly believe Granite Point Mortgage Trust is more favorable than American Tower.

Institutional and Insider Ownership

92.7% of American Tower shares are held by institutional investors. Comparatively, 51.6% of Granite Point Mortgage Trust shares are held by institutional investors. 0.2% of American Tower shares are held by company insiders. Comparatively, 2.3% of Granite Point Mortgage Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

American Tower has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500. Comparatively, Granite Point Mortgage Trust has a beta of 1.86, indicating that its share price is 86% more volatile than the S&P 500.

Earnings and Valuation

This table compares American Tower and Granite Point Mortgage Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Tower	$10.13 billion	9.56	$1.48 billion	$4.81	43.08
Granite Point Mortgage Trust	$39.86 million	3.57	-$207.05 million	($4.39)	-0.65

American Tower has higher revenue and earnings than Granite Point Mortgage Trust. Granite Point Mortgage Trust is trading at a lower price-to-earnings ratio than American Tower, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares American Tower and Granite Point Mortgage Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Tower	10.05%	22.01%	3.55%
Granite Point Mortgage Trust	-111.59%	-14.08%	-4.02%

Dividends

American Tower pays an annual dividend of $6.48 per share and has a dividend yield of 3.1%. Granite Point Mortgage Trust pays an annual dividend of $0.20 per share and has a dividend yield of 7.0%. American Tower pays out 134.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Granite Point Mortgage Trust pays out -4.6% of its earnings in the form of a dividend. Granite Point Mortgage Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

American Tower beats Granite Point Mortgage Trust on 12 of the 17 factors compared between the two stocks.

About American Tower

American Tower, one of the largest global REITs, is a leading independent owner, operator and developer of multitenant communications real estate with a portfolio of over 224,000 communications sites and a highly interconnected footprint of U.S. data center facilities.

About Granite Point Mortgage Trust

Granite Point Mortgage Trust Inc., a real estate investment trust, originates, invests in, and manages senior floating-rate commercial mortgage loans, and other debt and debt-like commercial real estate investments in the United States. The company provides intermediate-term bridge or transitional financing for various purposes, including acquisitions, recapitalizations, and refinancing, as well as a range of business plans, including lease-up, renovation, repositioning, and repurposing of the commercial property. 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 founded in 2015 and is headquartered in New York, New York.