American Strategic Investment (NYSE:NYC) versus PennyMac Mortgage Investment Trust (NYSE:PMT) Critical Analysis

American Strategic Investment (NYSE:NYC) and PennyMac Mortgage Investment Trust (NYSE:PMT) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Volatility and Risk

American Strategic Investment has a beta of 0.13, suggesting that its stock price is 87% less volatile than the S&P 500. Comparatively, PennyMac Mortgage Investment Trust has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500.

Profitability

This table compares American Strategic Investment and PennyMac Mortgage Investment Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Strategic Investment	-334.85%	-17.68%	-4.58%
PennyMac Mortgage Investment Trust	48.17%	11.48%	1.24%

Dividends

American Strategic Investment pays an annual dividend of $0.40 per share and has a dividend yield of 4.0%. PennyMac Mortgage Investment Trust pays an annual dividend of $1.60 per share and has a dividend yield of 10.9%. American Strategic Investment pays out -0.5% of its earnings in the form of a dividend. PennyMac Mortgage Investment Trust pays out 120.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent ratings and price targets for American Strategic Investment and PennyMac Mortgage Investment Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Strategic Investment	0	0	0	0	0.00
PennyMac Mortgage Investment Trust	0	2	3	0	2.60

PennyMac Mortgage Investment Trust has a consensus price target of $15.20, indicating a potential upside of 3.83%. Given PennyMac Mortgage Investment Trust’s stronger consensus rating and higher probable upside, analysts plainly believe PennyMac Mortgage Investment Trust is more favorable than American Strategic Investment.

Institutional & Insider Ownership

48.0% of American Strategic Investment shares are owned by institutional investors. Comparatively, 67.4% of PennyMac Mortgage Investment Trust shares are owned by institutional investors. 1.4% of American Strategic Investment shares are owned by company insiders. Comparatively, 0.9% of PennyMac Mortgage Investment Trust shares are owned by company 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 American Strategic Investment and PennyMac Mortgage Investment Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Strategic Investment	$62.06 million	0.42	-$105.92 million	($85.54)	-0.12
PennyMac Mortgage Investment Trust	$183.53 million	6.93	$160.98 million	$1.33	11.01

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

Summary

PennyMac Mortgage Investment Trust beats American Strategic Investment on 14 of the 16 factors compared between the two stocks.

About American Strategic Investment

American Strategic Investment Co. (NYSE: NYC) owns a portfolio of high-quality commercial real estate located within the five boroughs of New York City.

About PennyMac Mortgage Investment Trust

PennyMac Mortgage Investment Trust, through its subsidiary, primarily invests in mortgage-related assets in the United States. The company operates through: Credit Sensitive Strategies, Interest Rate Sensitive Strategies, Correspondent Production segments. Its Credit Sensitive Strategies segment invests in credit risk transfer (CRT) agreements, CRT securities, subordinate mortgage-backed securities (MBS), distressed loans, and real estate. The company's Interest Rate Sensitive Strategies segment engages in investing in mortgage servicing rights, excess servicing spreads, and agency and senior non-agency MBS, as well as related interest rate hedging activities. Its Correspondent Production segment is involved in purchasing, pooling, and reselling newly originated prime credit residential loans directly or in the form of MBS. The company primarily sells its loans to government-sponsored entities or PennyMac Loan Services, LLC. 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 shareholders. The company was incorporated in 2009 and is headquartered in Westlake Village, California.