PHH Corp (NYSE: PHH) and TPG RE Finance Trust (NASDAQ:TRTX) 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, valuation, institutional ownership, dividends, profitability, earnings and risk.
This table compares PHH Corp and TPG RE Finance Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TPG RE Finance Trust||48.73%||10.27%||3.73%|
97.4% of PHH Corp shares are owned by institutional investors. 2.5% of PHH Corp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This is a breakdown of current recommendations and price targets for PHH Corp and TPG RE Finance Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TPG RE Finance Trust||0||2||3||0||2.60|
PHH Corp currently has a consensus target price of $15.83, indicating a potential upside of 12.61%. TPG RE Finance Trust has a consensus target price of $21.20, indicating a potential upside of 7.78%. Given PHH Corp’s higher possible upside, equities analysts plainly believe PHH Corp is more favorable than TPG RE Finance Trust.
Valuation and Earnings
This table compares PHH Corp and TPG RE Finance Trust’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|PHH Corp||$734.00 million||0.98||-$261.67 million||($5.10)||-2.76|
|TPG RE Finance Trust||N/A||N/A||N/A||N/A||N/A|
TPG RE Finance Trust has higher revenue, but lower earnings than PHH Corp.
TPG RE Finance Trust beats PHH Corp on 5 of the 9 factors compared between the two stocks.
PHH Corp Company Profile
PHH Corporation is a standalone mortgage company. The Company provides outsourced mortgage banking services to a range of clients, including financial institutions and real estate brokers throughout the United States, and is focused on originating, selling, servicing and subservicing residential mortgage loans through its subsidiary, PHH Mortgage Corporation and its subsidiaries. It operates through two segments: Mortgage Production and Mortgage Servicing. The Mortgage Production segment provides mortgage loan origination services and sells mortgage loans. The Mortgage Servicing segment performs servicing activities for loans originated by the Company and mortgage servicing rights purchased from others, and acts as a subservicer for certain clients that own the underlying mortgage servicing rights. The Mortgage Production segment provides private label mortgage services to financial institutions and real estate brokers, and sources mortgage loans through its retail platform.
TPG RE Finance Trust Company Profile
TPG RE Finance Trust, Inc. is a commercial real estate finance company. The Company is engaged in originating, acquiring and managing commercial mortgage loans and other commercial real estate-related debt instruments. It focuses primarily on directly originating and selectively acquiring floating rate first mortgage loans that are secured by high quality commercial real estate properties undergoing some form of transition and value creation, such as re-tenanting, refurbishment or other form of repositioning. As of December 31, 2016, the Company’s portfolio consisted of 54 first mortgage loans. As of December 31, 2016, 97% of the loan commitments in its portfolio consisted of floating rate loans, and 98.6% of the loan commitments in its portfolio consisted of first mortgage loans.
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