Franklin BSP Realty Trust, Inc. (NYSE: FBRT)

Sector: Real Estate Industry: REIT - Mortgage CIK: 0001562528
Market Cap 853.79 Mn
P/B 0.58
P/E 12.54
P/S 3.49
ROIC (Qtr) 1.82
Div Yield % 14.16
Rev 1y % (Qtr) 65.73
Total Debt (Qtr) 4.34 Bn
Debt/Equity (Qtr) 2.95

About

Franklin BSP Realty Trust, Inc., known as FBRT, is a significant player in the real estate finance industry. The company's primary business activities involve generating revenue through the origination, acquisition, and management of a diversified portfolio of commercial real estate debt investments. These investments are secured by properties located both within and outside the United States. FBRT has made tax elections to be treated as a real estate investment trust (REIT) for U.S. federal income tax purposes since 2013, which allows it to enjoy...

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Price action

Investment thesis

Bull case

  • Cash position of 143.86M provides exceptional 184.20x coverage of minority interest expenses 781000, indicating strong liquidity.
  • Strong tangible asset base of 6.01B provides 28.78x coverage of intangibles 208.83M, indicating robust asset quality.
  • Cash position of 143.86M fully covers payables of 72.99M by 1.97x, showing strong vendor relationship management.
  • Tangible assets of 6.01B provide robust 233.51x coverage of receivables 25.74M, showing strong asset quality.

Bear case

  • Operating cash flow of (75.16M) barely covers its investment activities of 738.67M, with a coverage ratio of -0.10, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 143.86M provide limited coverage of acquisition spending of (297.31M), which is -0.48x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of (75.16M) shows concerning coverage of stock compensation expenses of 8.95M, with a -8.40 ratio indicating potential earnings quality issues.
  • Free cash flow of (102.07M) provides weak coverage of capital expenditures of 26.91M, with a -3.79 ratio suggesting additional external financing needs for growth initiatives.
  • Free cash flow of (102.07M) represents just 0.17x of debt issuance (583.67M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the REIT - Mortgage
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NLY Annaly Capital Management Inc 13.57 Bn 10.12 7.94 107.02 Bn
2 AGNC AGNC Investment Corp. 11.33 Bn 16.49 30.46 95.01 Bn
3 STWD Starwood Property Trust, Inc. 6.34 Bn 17.32 3.51 21.43 Bn
4 RITM Rithm Capital Corp. 5.69 Bn 7.32 1.14 34.97 Bn
5 BXMT Blackstone Mortgage Trust, Inc. 3.26 Bn 30.37 6.41 15.46 Bn
6 ARR Armour Residential REIT, Inc. 1.84 Bn 35.07 15.78 16.56 Bn
7 DX Dynex Capital Inc 1.60 Bn 9.10 6.93 11.75 Bn
8 ABR Arbor Realty Trust Inc 1.50 Bn 9.82 2.84 10.40 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.71 0.83
EV to Cash from Ops. EV/CFO -58.35 -102.96
EV to Debt EV to Debt 1.01 1.31
EV to EBIT EV/EBIT 47.21 -260.73
EV to EBITDA EV/EBITDA 47.16 -16.37
EV to Free Cash Flow [EV/FCF] EV/FCF -42.97 3.47
EV to Market Cap EV to Market Cap 5.14 9.18
EV to Revenue EV/Rev 17.91 26.77
Price to Book Value [P/B] P/B 0.58 0.68
Price to Earnings [P/E] P/E 12.54 -4.85
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.52 -0.55
Dividend Payout Ratio % Div Payout % (Qtr) 178.10 29.47
Dividend per Basic Share Div per Share (Qtr) 1.43 1.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -114.83 57.60
Interest Coverage Interest Coverage 0.00 -0.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -124.49 37.60
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -59.35 24.22
Dividend Growth (1y) % Div 1y % (Qtr) -1.04 4.53
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -0.30 17.83
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -33.01 9.86
EBIT Growth (1y) % EBIT 1y % (Qtr) -3.18 20.98
EBT Growth (1y) % EBT 1y % (Qtr) -3.18 11.17
EPS Growth (1y) % EPS 1y % (Qtr) -2.44 59.25
FCF Growth (1y) % FCF 1y % (Qtr) -136.70 59.63
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 18.39 20.65
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.04 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.83
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 2.95 5.05
Interest Cover Ratio Interest Cover Ratio 0.00 -0.17
Times Interest Earned Times Interest Earned 0.00 -0.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 41.00 137.11
EBIT Margin % EBIT Margin % (Qtr) 37.93 142.19
EBT Margin % EBT Margin % (Qtr) 37.93 129.16
Gross Margin % Gross Margin % (Qtr) 89.70 117.97
Net Profit Margin % Net Margin % (Qtr) 27.80 125.89