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Friday, May 20, 2022

Do investors Have the Ability to Unlock Broadmark Realty Capital Inc. (BRMK) Stock’s Potential?

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Broadmark Realty Capital Inc. (BRMK) is a specialty real estate financing business, which usually provides financial solutions in the range of $2 to $50 million across the complete debt capital stack for real estate opportunities (residential and commercial) throughout the US. The company is ranked at the 186th position in the total of 253 REIT and Equity Trust businesses. The market volume for the REIT industry, being measured by the revenues, is up to $227 billion in 2022, with a 5.9% growth. From 2017 to 2022, the specific industry grew by 1.3%.

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BRMK: Recent Developments

BRMK informed on April 25, about the addition of an independent director, Pinkie D. Mayfield, to strengthen its Board of Directors, with immediate effect. With the addition of Ms. Mayfield, the size of the company’s BoDs increased to eight, with six independent directors. She has already served as the Vice President of Corporate Affairs and Chief Communications Officer at Graham Holdings Company.

BRMK: Earnings

The company observed a 1% decrease in its revenue and an 8% decrease in its earnings per share for the fiscal year 2021. The recorded revenue was $120.5 million with $0.62 EPS. The company’s revenue remained almost stable during the past three years, while its earnings saw a rapid gain. The annual revenue and EPS estimates for the fiscal year 2022 are $138.5 million and $0.82 respectively.

Comparison with Peers

When BRMK’s %age yearly stock price change comparison is made with its peers, a declining trend was observed for all the REIT companies. The company whose stock price was hit most by several factors is AGNC, then come IVR, CMTG, ARR, STWD, BRMK, EFC, and MFA. The reason behind this decline is the after-effects of the pandemic, along with geopolitical tensions.

Insider Transactions and Analyst Ratings

BRMK owns up to 132.7 million outstanding shares, of which 47.9% shares are held by institutions, while 4.2% are owned by the insiders. Raymond James’ analyst Stephen Laws maintained the ‘Outperform’ rating and lowered its action price from $12.5 to $11.0.

Risk Factors

No good coverage was given to the dividend of 10% by earnings or predictions to be in the upcoming three years.

Bottom Line

A 12.8x PE ratio is well below the market ratio (16.8x) and the debt level of the company is also low, which are the plus points, the investors see before investing. Also, the earnings of the company are expected to increase by 10.5% over the next three years.

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