Blackstone Mortgage TrustNYSE: BXMT

Blackstone Mortgage Trust (BXMT) looks like a good dividend company to invest in. It has an exciting dividend yield of almost 10%, trades below book value, and is part of Blackstone, the biggest private equity company in the world.

Blackstone Mortgage Trust Inc. (NYSE:BXMT ) Q3 2024 Earnings Conference Call October 23, 2024 9:00 AM ET Company Participants Katie Keenan - Chief Executive Officer Anthony Marone - Chief Financial Officer Tim Hayes - Vice President, Shareholder Relations Conference Call Participants Don Fandetti - Wells Fargo Tom Catherwood - BTIG Harsh Hemnani - Green Street Steve Delaney - Citizens JMP Jade Ramani - KBW Doug Harter - UBS Rick Shane - JP Morgan Eric Dray - Bank of America Operator Good day and welcome to the Blackstone Mortgage Trust third quarter 2024 investor call. Today's conference is being recorded.

Blackstone Mortgage Trust (BXMT) came out with quarterly earnings of $0.49 per share, beating the Zacks Consensus Estimate of $0.36 per share. This compares to earnings of $0.78 per share a year ago.

Recent developments in interest rates and market sentiment on rate cuts present an opportunity for highly discounted mortgage REITs with office exposure. Despite challenges, the risk-return profile of these mREITs has improved, making them potentially lucrative for patient, long-term investors. Granite Point Mortgage Trust, Claros Mortgage Trust, and Blackstone Mortgage Trust are rated as Speculative Buys due to their significant discounts to book value and growth prospects.

Hercules Capital, Inc. and Ladder Capital Corp are top picks in their sectors, offering high and well-covered dividends supported by robust cash flows and low leverage. Hercules offers a 10.5% yield with a low-cost structure and expertise in tech and life sciences. Ladder provides a 7.8% yield with a conservative loan portfolio, significant insider ownership, and strong financial performance.

This year, the saying "sell in May and go away" could be particularly relevant for real estate investment trusts (REITs) that are most impacted by the two main factors affecting the sector.

Blackstone Mortgage Trust's stock dropped by 4.6% following a net loss in Q1 caused by issues with office loans. An uptick in the anticipated credit loss reserve impacted the company's ability to cover dividends, prompting worries about the dividend's longevity. Market apprehension over the trust's office loan portfolio's creditworthiness is evident in the 29% discount to book value.

Blackstone Mortgage (BXMT) has a strong track record of surpassing earnings expectations and currently has the ideal mix of factors to potentially exceed expectations in its upcoming quarterly report.

Blackstone Mortgage Trust, Inc. has a diversified asset base across different regions and sectors, but we anticipate potential negative impacts from duration and convexity later this year. While short-term U.S. inflation is strong, long-term trends indicate that yields may decrease by late 2024. Additionally, similar challenges are faced in BXMT's other operating regions. The company may face constraints on capital due to ongoing economic risks, which could limit its profit potential.