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As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the thrifts & mortgage finance industry, including PennyMac Mortgage Investment Trust (NYSE:PMT) and its peers.
Thrifts & Mortgage Finance institutions operate by accepting deposits and extending loans primarily for residential mortgages, earning revenue through interest rate spreads (difference between lending rates and borrowing costs) and origination fees. The industry benefits from demographic tailwinds as millennials enter prime homebuying age, technological advancements streamlining the loan approval process, and potential interest rate stabilization improving affordability. However, significant headwinds include net interest margin compression during rate volatility, increased competition from fintech disruptors offering digital-first experiences, mounting regulatory compliance costs, and potential housing market corrections that could impact loan portfolios and default rates.
The 15 thrifts & mortgage finance stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 4.7% while next quarter’s revenue guidance was 0.7% above.
In light of this news, share prices of the companies have held steady as they are up 4.2% on average since the latest earnings results.
Operating as a real estate investment trust since 2009 to maintain tax advantages, PennyMac Mortgage Investment Trust (NYSE:PMT) is a specialty finance company that invests in mortgage-related assets and operates a correspondent lending business.
PennyMac Mortgage Investment Trust reported revenues of $99.23 million, up 22.7% year on year. This print exceeded analysts’ expectations by 2.1%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ net interest income estimates.
"In the third quarter PMT produced outstanding results and growth in book value per share with a 14 percent annualized return on common equity," said Chairman and CEO David Spector.
Interestingly, the stock is up 15.6% since reporting and currently trades at $13.53.
Is now the time to buy PennyMac Mortgage Investment Trust? Access our full analysis of the earnings results here, it’s free.
Operating under the guidance of Ellington Management Group, a respected name in structured credit markets, Ellington Financial (NYSE:EFC) acquires and manages a diverse portfolio of mortgage-related, consumer-related, and other financial assets to generate returns for investors.
Ellington Financial reported revenues of $82.76 million, up 23.6% year on year, outperforming analysts’ expectations by 4.9%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ revenue estimates.
The market seems content with the results as the stock is up 1.6% since reporting. It currently trades at $13.89.
Is now the time to buy Ellington Financial? Access our full analysis of the earnings results here, it’s free.
Founded in 1917 and rebranded from Washington Federal in 2023, WaFd (NASDAQ:WAFD) is a bank holding company that provides lending, deposit services, and insurance through its Washington Federal Bank subsidiary across eight western states.
WaFd Bank reported revenues of $188.3 million, up 7.6% year on year, falling short of analysts’ expectations by 2.6%. It was a softer quarter as it posted a significant miss of analysts’ revenue estimates and a miss of analysts’ net interest income estimates.
As expected, the stock is down 6.8% since the results and currently trades at $31.45.
Read our full analysis of WaFd Bank’s results here.
Tracing its roots back to 1938 during the Great Depression era when savings and loans were vital to homeownership, TFS Financial (NASDAQ:TFSL) is a savings and loan holding company that provides mortgage lending, deposit services, and other retail banking products primarily in Ohio and Florida.
TFS Financial reported revenues of $84.48 million, up 14% year on year. This print was in line with analysts’ expectations. It was a strong quarter as it also logged EPS in line with analysts’ estimates and a narrow beat of analysts’ tangible book value per share estimates.
The stock is flat since reporting and currently trades at $14.
Read our full, actionable report on TFS Financial here, it’s free.
Born in Detroit during the 1980s and evolving into a tech-driven financial powerhouse, Rocket Companies (NYSE:RKT) is a fintech company that provides digital mortgage lending, real estate services, and personal finance solutions through its technology platform.
Rocket Companies reported revenues of $1.78 billion, up 34.8% year on year. This number surpassed analysts’ expectations by 5.3%. Overall, it was an exceptional quarter as it also recorded a beat of analysts’ EPS estimates and a solid beat of analysts’ net interest income estimates.
The stock is up 36.1% since reporting and currently trades at $22.04.
Read our full, actionable report on Rocket Companies here, it’s free.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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