Essential Properties Realty Trust (NYSE:EPRT) and Franklin BSP Realty Trust (NYSE:FBRT) Financial Analysis

Essential Properties Realty Trust (NYSE:EPRT) and Franklin BSP Realty Trust (NYSE:FBRT) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Analyst Recommendations

This is a summary of current ratings for Essential Properties Realty Trust and Franklin BSP Realty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Essential Properties Realty Trust	0	2	11	0	2.85
Franklin BSP Realty Trust	0	0	3	1	3.25

Essential Properties Realty Trust currently has a consensus target price of $33.06, indicating a potential upside of 1.40%. Franklin BSP Realty Trust has a consensus target price of $15.38, indicating a potential upside of 18.91%. Given Franklin BSP Realty Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Franklin BSP Realty Trust is more favorable than Essential Properties Realty Trust.

Dividends

Essential Properties Realty Trust pays an annual dividend of $1.16 per share and has a dividend yield of 3.6%. Franklin BSP Realty Trust pays an annual dividend of $1.42 per share and has a dividend yield of 11.0%. Essential Properties Realty Trust pays out 99.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Franklin BSP Realty Trust pays out 107.6% 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 and Insider Ownership

97.0% of Essential Properties Realty Trust shares are held by institutional investors. Comparatively, 59.9% of Franklin BSP Realty Trust shares are held by institutional investors. 0.8% of Essential Properties Realty Trust shares are held by company insiders. Comparatively, 0.7% of Franklin BSP Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Essential Properties Realty Trust and Franklin BSP Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Essential Properties Realty Trust	48.12%	6.28%	3.96%
Franklin BSP Realty Trust	43.03%	11.96%	2.62%

Valuation and Earnings

This table compares Essential Properties Realty Trust and Franklin BSP Realty Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Essential Properties Realty Trust	$359.60 million	15.89	$190.71 million	$1.17	27.86
Franklin BSP Realty Trust	$549.24 million	1.93	$145.21 million	$1.32	9.80

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

Volatility and Risk

Essential Properties Realty Trust has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500. Comparatively, Franklin BSP Realty Trust has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500.

Summary

Essential Properties Realty Trust beats Franklin BSP Realty Trust on 9 of the 17 factors compared between the two stocks.

About Essential Properties Realty Trust

Essential Properties Realty Trust, Inc., a real estate company, acquires, owns, and manages single-tenant properties in the United States. The company leases its properties to middle-market companies, such as restaurants, car washes, automotive services, medical and dental services, convenience stores, equipment rental, entertainment, early childhood education, grocery, and health and fitness on a long-term basis. As of December 31, 2021, it had a portfolio of 1, 451 properties. 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 2016 and is headquartered in Princeton, New Jersey.

About Franklin BSP Realty Trust

Benefit Street Partners operates as a self-managed real estate investment trust (REIT). BSP earns income from investing in a leveraged portfolio of residential mortgage pass-through securities consisting almost exclusively of adjustable-rate mortgage (ARM) securities issued and guaranteed by government-sponsored enterprises, either Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac) (together, the government-sponsored enterprises (GSEs)), or by an agency of the federal government, Government National Mortgage Association (Ginnie Mae). BSP’s investment strategy focuses on managing a portfolio of residential mortgage investments consisting almost exclusively of ARM Agency Securities. As of December 31, 2012, the Company’s securities consisted of Agency Securities classified as available-for-sale and Residential mortgage securities classified as held-to-maturity.