Reviewing Impac Mortgage (NYSE:IMH) and PennyMac Mortgage Investment Trust (NYSE:PMT)

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

Institutional & Insider Ownership

12.5% of Impac Mortgage shares are held by institutional investors. Comparatively, 67.4% of PennyMac Mortgage Investment Trust shares are held by institutional investors. 2.8% of Impac Mortgage shares are held by company insiders. Comparatively, 0.9% of PennyMac Mortgage Investment 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 Impac Mortgage and PennyMac Mortgage Investment Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Impac Mortgage	N/A	-1,309.14%	-37.12%
PennyMac Mortgage Investment Trust	53.81%	11.90%	1.32%

Earnings & Valuation

This table compares Impac Mortgage and PennyMac Mortgage Investment Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Impac Mortgage	$8.60 million	0.17	-$39.43 million	($1.71)	-0.02
PennyMac Mortgage Investment Trust	$429.02 million	2.65	$199.65 million	$1.36	9.64

PennyMac Mortgage Investment Trust has higher revenue and earnings than Impac Mortgage. Impac Mortgage 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.

Volatility and Risk

Impac Mortgage has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500. Comparatively, PennyMac Mortgage Investment Trust has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Impac Mortgage and PennyMac Mortgage Investment Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Impac Mortgage	0	0	0	0	0.00
PennyMac Mortgage Investment Trust	0	4	3	0	2.43

PennyMac Mortgage Investment Trust has a consensus price target of $14.93, indicating a potential upside of 13.87%. Given PennyMac Mortgage Investment Trust’s stronger consensus rating and higher possible upside, analysts clearly believe PennyMac Mortgage Investment Trust is more favorable than Impac Mortgage.

Summary

PennyMac Mortgage Investment Trust beats Impac Mortgage on 13 of the 14 factors compared between the two stocks.

About Impac Mortgage

Impac Mortgage Holdings, Inc. engages in the provision of mortgage and real estate solutions. It operates through the following segments: Mortgage Lending, Real Estate Services, and Long-Term Mortgage Portfolio. The Mortgage Lending segment offers mortgage lending products through lending channels, retail, wholesale, and correspondent, and retains mortgage servicing rights and warehouse lending facilities. The Real Estate Services segment performs servicing and provides loss mitigation services for securitized long-term mortgage portfolio. The Long-Term Mortgage Portfolio segment is composed of residual interests in securitization trusts. The company was founded by Joseph R. Tomkinson in August 1995 and is headquartered in Newport Beach, CA.

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.