Head to Head Comparison: Braemar Hotels & Resorts (NYSE:BHR) & Franklin BSP Realty Trust (NYSE:FBRT)

Braemar Hotels & Resorts (NYSE:BHR) and Franklin BSP Realty Trust (NYSE:FBRT) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.

Profitability

This table compares Braemar Hotels & Resorts and Franklin BSP Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Braemar Hotels & Resorts	-3.65%	-8.43%	-1.20%
Franklin BSP Realty Trust	53.82%	14.32%	3.20%

Earnings & Valuation

This table compares Braemar Hotels & Resorts and Franklin BSP Realty Trust’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Braemar Hotels & Resorts	$739.34 million	0.22	-$27.02 million	($1.12)	-2.22
Franklin BSP Realty Trust	$263.95 million	3.93	$145.21 million	$1.32	9.60

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Braemar Hotels & Resorts and Franklin BSP Realty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Braemar Hotels & Resorts	0	2	0	0	2.00
Franklin BSP Realty Trust	0	0	3	1	3.25

Braemar Hotels & Resorts currently has a consensus price target of $2.50, indicating a potential upside of 0.60%. Franklin BSP Realty Trust has a consensus price target of $14.75, indicating a potential upside of 16.42%. Given Franklin BSP Realty Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Franklin BSP Realty Trust is more favorable than Braemar Hotels & Resorts.

Insider & Institutional Ownership

64.8% of Braemar Hotels & Resorts shares are held by institutional investors. Comparatively, 59.9% of Franklin BSP Realty Trust shares are held by institutional investors. 1.7% of Braemar Hotels & Resorts 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 hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Braemar Hotels & Resorts has a beta of 1.96, suggesting that its stock price is 96% more volatile than the S&P 500. Comparatively, Franklin BSP Realty Trust has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500.

Dividends

Braemar Hotels & Resorts pays an annual dividend of $0.20 per share and has a dividend yield of 8.0%. Franklin BSP Realty Trust pays an annual dividend of $1.42 per share and has a dividend yield of 11.2%. Braemar Hotels & Resorts pays out -17.9% of its earnings in the form of a dividend. 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.

Summary

Franklin BSP Realty Trust beats Braemar Hotels & Resorts on 12 of the 17 factors compared between the two stocks.

About Braemar Hotels & Resorts

Braemar Hotels & Resorts is a conservatively capitalized REIT that invests primarily in high RevPAR, full-service luxury hotels and resorts. We are listed on the New York Stock Exchange under the symbol BHR and are externally-advised by Ashford (NYSE American: AINC).

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.