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Broadmark Realty Capital Future Growth
Future criteria checks 5/6
We currently don't have sufficient analyst coverage to forecast growth and revenue for Broadmark Realty Capital.
Key information
130.2%
Earnings growth rate
131.10%
EPS growth rate
| Mortgage REITs earnings growth | 26.3% |
| Revenue growth rate | 27.9% |
| Future return on equity | n/a |
| Analyst coverage | Low |
| Last updated | 10 May 2023 |
Recent future growth updates
Recent updates
Seeking Alpha • Jan 26
Broadmark Realty Capital Has Been Hit But It Is Still An Opportunity
Summary Broadmark Realty Capital is a hard money lender that makes high-risk, high-interest one to three year loans to real estate developers. BRMK has posted higher delinquencies, property foreclosures, cut its dividend, and its CEO and CFO resigned. This drove the stock price down more than 50% last year, only to recover a little this year. Despite the risk, and the negative recent events, I believe BRMK is an opportunity because its current stock price already prices in catastrophic scenarios. If the catastrophic scenarios do not materialize, current share prices are undervalued. Broadmark Realty Capital (BRMK) is a national hard-money lender REIT, with a $900 million loan book. The company specializes in high-risk, high-interest loans that are backed more by collateral than by the borrower's credit history or credit score. I wrote a buy rated article on the company in June. The company's stock has fell 40% since. The reasons behind the recent fall are multiple. BRMK was recently hit by higher provisions for loan losses, property management expenses, and interest charges. The company's CEO and CFO resigned, with the company's Chairman and founder now at the helm. Its dividend was cut in half (something that was expected). Still, I believe BRMK is an opportunity. The biggest risks I see ahead are twofold: extreme default levels, big enough to draw NAV down 50%; and higher property management expenses, that put a drag on recurring earnings. These risks are counteracted by 90% equity financing and a 40% discount on tangible book value per share. This provides the company with three protections: defaults have to be catastrophic to put NAV below the current share price; the company can sell property at steep discounts to avoid managing it without putting NAV below the current share price; and the company can increase rates because higher leveraged competitors have to leave the market. Note: Unless otherwise stated, all information has been obtained from BRMK's filings with the SEC. Business description National hard-money lenders: Hard-money lenders concentrate on short-term loans (one to three years) that carry a high interest and are collateralized by carved-out assets, sometimes with recourse covenants or personal guarantees. These loans are mostly used as bridges until longer-term cheaper financing can be arranged. High interest equals high default risk: Credit is a commodity, and the credit market is very competitive. That means an informed borrower will tend to find the lowest interest possible for its statistical risk bracket. The fact that BRMK was able to charge 10% rates during 2021, a time when the Federal rate hit 0%, talks about the risk of its loan-book. Credit score versus asset based lending: HMLs make their living by concentrating on a particular type of borrower that does not qualify for much cheaper bank loans. With lower capital supply, the credit spread on these loans is high. The profitability of an HML is based on the idea that the higher credit spread more than compensates for the higher risk. To further reduce risks, HMLs concentrate on asset collateral and recourse covenants. Concentration in the center-west: 75% of the company's loan book is concentrated in Washington, Colorado, Utah and Texas. Ultra low leverage: BRMK is 90% equity financed, registering only a $100 million note paying 5%, issued in November 2021. This greatly reduces risk, given that a credit loss is not multiplied by leverage across the book, and that interest income loss is not operationally multiplied by interest costs down the income statement. Lean operation: The company's operational expenses made a small percentage of interest income. Unfortunately, BRMK is adding property management expenses on its foreclosed properties. Property management expenses not run at half the level of G&A expenses at the quarterly level, from being almost negligible one year ago. Data by YCharts Conservativeness: The company did not increase its book significantly during the 2021 boom. This conservativeness is in part generated by REIT taxation, which makes the company distribute 90% of earnings, which makes it difficult to accumulate capital and expand book. Still, other REITs took cheap leverage in order to expand their books, and BRMK did not. An example of this is Sachem Capital Corp (SACH), another HML, but much more leveraged (1.3 against 0.09 for BRMK) and with an exploding book. Data by YChartsData by YCharts Low insider ownership, no strong shareholder: The company's managers and directors hold only 3% of the company's stock. The largest shareholders are ETF groups like Vanguard and BlackRock, with less than 9% participation each (according to the company's proxy statements for FY22). I generally prefer a company where managers have skin in the game and where there is at least one strong shareholder. Recent developments The situation has not been good in general for BRMK, several negative developments have driven the stock's price down 50%, only to recover some 10% back. Dividend cut: When I wrote my latest article on BRMK in June 2022, the company was not covering its dividend with cash. A cut was imminent, but the yield seemed interesting even after the cut. The company then decided to cut the dividend in half, from $0.84 to $0.42 yearly (paid monthly). Resignation of CEO and CFO: The company's CFO resigned in October, followed by the CEO in November. The resignation of the CEO was communicated on the same date as the 3Q22 results (more on this below). The Interim CEO position is now occupied by the company's founder and Chairman, who occupied that position since the company went public in 2019 until 2021. The company granted RSUs to the newly elected CFO and Interim CEO for $750 thousand that will hit SG&A expenses in 4Q22. Higher delinquencies: The company's delinquent loans increased 15% since 2021, representing $115 million as of 3Q22 against $100 million in December 2021. The company reports $286 million in non accruals but that includes committed but not released funds as well. Higher loan loss provisions: More defaults, but particularly the foreclosure of a hotel property that has become difficult to sale, prompted the company to recognize $13 million in loan loss provision allowances in 3Q22 alone. This represents a huge drag on quarterly earnings. Property management expenses: BRMK seized property book now stands at $93 million, from $68 million in December 2021. The book would have jumped to $121 million hadn't been for a financed sale for $28 million of residential condos. The biggest contributor was a senior housing development, carried at $50 million. As a reader accurately pointed, managing properties is much more expensive than managing loans. Quarterly property management expenses, close to non existent one year ago, now run at $1.5 million. Valuation and risks With all of these negative developments, plus interest rates that continue rising, plus the company's risky loan book, how am I bullish on the stock? The answer comes from Howard Marks' comment that 'a low-quality asset can constitute a good buy'. In my opinion, BRMK's risks are more than discounted on its current price. While tangible book value has fell 7%, and operating income another 21% (this is before loan loss provisions), the stock's price is today 58% lower than two years ago. Data by YCharts Higher delinquencies: The main risk for BRMK is the danger of posting more delinquencies. This has cascading effects because it increases allowances for loan losses and materialized losses (by selling properties below their recorded value). It also increases managerial expenses, reducing operating income and putting the dividend at risk. Balance sheet protection: The company currently has $7.27 per share of tangible book value, against a stock price of $4.2. That represents a 43% discount. Because the balance sheet is mostly equity financed, for that discount to materialize, the company needs to post loan losses for an equivalent 43%. That means that almost one in every two loans is completely lost, or that every loan was overpriced by 100%. The dividend cut is a capitalization strategy: The biggest drag on earnings has been higher loan loss allowances. These are non cash expenses that recognize that an asset's value (a note receivable) is not as high as it was thought to be. However, because accrual income is reduced through higher allowances, the company has to distribute less dividends. The cash difference is being used to capitalize the company, something that is usually difficult for a REIT. Data by YCharts Recurring cash income protection: When the company posts a loan loss allowance, it is recognizing a past event. This talks more about the company's previous decisions (and its financial sustainability as considered in the balance sheet) rather than current profitability. On the other hand, if more loans go into non accrual, the company seizes on property or does not recover the full value of its loans, this affects future income generation. This happens for two reasons: the book is reduced, and therefore its ability to generate income decreases; and expenses (particularly property management) increase.Seeking Alpha • Jan 17
Broadmark Realty Capital declares $0.035 dividend
Broadmark Realty Capital (NYSE:BRMK) declares $0.035/share monthly dividend, in line with previous. Forward yield 10.07% Payable Feb. 15; for shareholders of record Jan. 31; ex-div Jan. 30. See BRMK Dividend Scorecard, Yield Chart, & Dividend Growth.Analysis Article • Nov 17
Broadmark Realty Capital Inc. (NYSE:BRMK) Analysts Just Cut Their EPS Forecasts Substantially
Today is shaping up negative for Broadmark Realty Capital Inc. ( NYSE:BRMK ) shareholders, with the analysts delivering...Seeking Alpha • Nov 15
Broadmark Realty Capital: The Chronicle Of A Foretold Disaster
Summary Since our last report, Broadmark Realty Capital Inc.’s conditions have gone from bad to worse. Broadmark posted Q3 results with earnings misses on the top and bottom lines. Broadmark Realty results this quarter were disastrous, with revenue decreasing by 5% and EPS decreasing by 83% since last quarter. Broadmark's CEO left or was let go on the day of the earnings call, and the CFO is leaving as of December 1st. Broadmark management seems more worried about stock performance than the company’s performance. It looks like the company does not want to cut its dividend even if its earnings do not cover it to protect the stock’s price. What apparently seemed to be an unleveraged low-risk mortgage company has resulted in being a value trap with considerable downfall and structural issues. Investment Thesis We were early shareholders of this firm even before the company went public. By that time, Broadmark Realty Capital Inc. (BRMK) appeared to be one of the safest bets. The company’s ability to deploy capital in a real estate bull market was second to none. It was one of the few no-leveraged REITs with monthly steady dividend payments usually yielding more than 10%, which had lasted for about ten years. Since the IPO, things dramatically changed, and we liquidated our position sometime after because we had doubts about the company’s future and the management’s performance. However, we kept the company under the radar to check whether our reservations, which made us leave in the first place, would recede, creating a re-entry point. In our last report, we explained why we were not interested, even though Broadmark Realty was trading at a discount to its book value. We were proven right after these last earnings. Our analysis reflects that BRMK faces serious performance issues primarily because of poor management decision-making. Nevertheless, we don’t understand why the company insists on distributing a dividend that is far from being covered, destroying its asset value. The current macro environment creates an arduous scenario for lending companies. Furthermore, BRMK is moving toward a type of loan (Mezzanine) that tremendously increases the stock’s risk profile. We believe Broadmark’s current future is too obscure, and we would wait for the right shifts. New capable management or an activist should come in and sort things out before approaching the stock again. The continued urge to pay unsustainable dividends Broadmark has been paying dividends on a monthly frequency of $0.07/share for the past nine months against the average net earnings of $0.03/share. The dividend cover ratio for the past ten quarters has always been less than one, and now this quarter has touched the ridiculous ratio of 0.09. Some might argue that REITs generally have higher dividend rates to get tax advantages accordingly to the Companies Act. As per regulations, REITs must distribute at least 90% of the pretax income. BRMK’s average monthly pretax income was $0.03/share, of which they were required to pay a minimum of $0.027/share; the company paid 2.6 times that requirement. Even if we look at distributable earnings where we add back all non-cash expenses even though they will be realized in the future, like impairment and provision for loan losses, we get distributable earnings of $0.46/ share YTD, against which the YTD dividend paid was $0.63/ share. The continued urge to pay more dividends than what they can earn as a company and generate in cashflows is concerning. It only shows that the management is more concerned about the stock's performance than the company’s value creation. This can also be felt in the latest earnings press release in which, despite all the issues the company faces, the main highlight of the report written in the first line in bold letters was, “Board of Directors Approves $75 Million Stock Repurchase Plan.” This shows how management creates what appears to be a smokescreen to protect the share price. This was at a time when the CEO was leaving, when they reported only $2m in net income, an EPS of .02, and missed revenue expectations. The Giant news was buying back shares, and it did send the stock up at the time of the release; however, the rise did not last long. BRMK is the perfect example of a dividend-yield trap where paying unsustainable dividends contributes to destroying the asset value. We can see this with the stock’s performance against the market. As a reference, the graph of BRMK’s performance with Vanguard’s real estate ETF (VNQ) is below. We can see BRMK consistently underperforming. Yahoo Finance Capital Allocation One further issue that needs highlighting is their ability to allocate capital efficiently. We highlighted this in our last report too, and many didn’t agree with this. In this quarter, new loan originations are $123.4m compared to $306.7m in the same quarter last year. Loans repaid during this quarter are 200m giving us a loan origination net off repaid of $-76.6m versus $250.3m of the same quarter last year. This is very alarming for us, as negative net loan originations have been a rare sight even in BRMK’s history. This capital allocation issue can be further pointed up by the fact that they have initiated a share repurchase program, which was the highlight of the press release. New loans Originations is the primary operating activity of BRMK. If they want to have an additional capital allocation lever, it underlines the uncertainty regarding the new loan’s origination in this challenging macroeconomic environment. What is alarming is their decision to pursue Mezzanine loans, a 2nd-degree mortgage loan in which the lender provides a subordinate debt in return for higher interest rates and possible equity options. This is the riskiest form of debt, and if the client goes bankrupt, the company could lose all its capital in the transaction. The only reason that seems logical about pursuing this road is that Management might not be able to deploy their capital through their primary product and more secure form of loan, the “Senior Secured Loans.” Although the management is signaling that this is not their priority and will not be a big part of their loan portfolio if they face tough times in deploying their capital efficiently, this stance could change quickly. They have already done their first mezzanine loan of $10m, and if they decide to pursue it further, this will affect their business risk profile. BRMK's management prides itself on being the lowest leveraged company in the sector, but if they start giving out mezzanine loans, the extra risk incorporated will be more than if the firm decided to take further debt. Other Highlights from Q3 The situation of the management team at BRMK has been volatile, and that too in an economic downturn when stability would have been really appreciated. The current CFO is leaving as of 1st December, and the CEO was let go on earnings day. The latter highlights a possible disagreement between the management and the board. Now there is a search for new CEO and CFO; we don’t know how long it will take, and during these uncertain times and when the company is not performing near its best, this is really a worrying sign for us. Management's stubborn stance on an unsustainable dividend policy is causing the company to take up more and more loans to meet its liquidity needs and to keep paying dividends. To that account, their interest expense has increased from $1.7m in nine months ending September 2021 to $6.4m now in the first nine months of 2022. Real property management expenses have been increasing in 2022, and this is because of the $93.51m properties they hold, out of which $33.1m are held for sale and $27.4m are held for use. Impairment on these properties in this quarter is $1.4m compared to $0.35m last quarter. The default rate now is at 19%, but we expect it to increase further with the deteriorating economic conditions as we head into an expected recession. The liquidity position of Broadmark seems improved from the quarter as their cash balance is up; this is mainly due to the negative net loan origination for this quarter which is also a problem. Cash reported for this quarter is $61.1m. In 21YE, cash was $132.9m, and in 20YE, cash was $223.4m. When we compare the current balance to the previous year's ends, we can see the impact of dividends. We believe that without negative net loan originations, BRMK would have to turn to its revolving credit facility to meet its liquidity needs. We have highlighted the issue of credit risk that Broadmark faces. In this quarter, our fears are starting to come true as the credit losses now are $12.3m from $2.6m in the same quarter last year, an increase of 373%. Management is claiming that out of this total credit loss, $9.1m is from a hotel, and they are treating it as a non-recurring event as hotels are less than 5% of their portfolio. But we know that all sectors face pressure from the macroeconomic headwinds, and conditions will get even worse if the terminal rates from the FED would be higher than expected and the economic downturn becomes more prolonged and profound. This issue can be further highlighted by the YTD increase in Collateral dependent loans, which have seen an increase of 83%, from $45.7m at the start of the year to $83.7m now. Almost all the asset classes have seen an increase. Their loan to values ratio is not reliable anymore, since these loans originated when the real estate sector was in a boom, and the properties were priced very highly.Seeking Alpha • Nov 07
Broadmark Realty Capital Non-GAAP EPS of $0.14 misses by $0.02, revenue of $27.1M misses by $1.42M
Broadmark Realty Capital press release (NYSE:BRMK): Q3 Non-GAAP EPS of $0.14 misses by $0.02. Revenue of $27.1M (-11.4% Y/Y) misses by $1.42M. Closed new originations and amendments of $137.9 million, with a weighted average yield of 12.9% and at a weighted average loan-to-value of 59.7%. Received $197.8 million of loan payoffs during the third quarter of 2022. Principal outstanding on loans in contractual default placed on non-accrual status of $115.4 million as of September 30, 2022.Seeking Alpha • Oct 14
Broadmark Realty Capital CFO David Schneider to resign
Broadmark Realty Capital (NYSE:BRMK) has announced that David Schneider, CFO, intends to resign from his position in connection with accepting an opportunity at a private company that does not compete with Broadmark. To assist with an orderly transition, Mr. Schneider intends to remain in his role at the Co. until December 31, 2022, or the appointment of his successor if earlier. The Company plans to launch a search for a new CFO.Seeking Alpha • Sep 15
Broadmark Realty Capital declares $0.07 dividend
Broadmark Realty Capital (NYSE:BRMK) declares $0.07/share monthly dividend, in line with previous. Forward yield 13.35% Payable Oct. 17; for shareholders of record Sept. 30; ex-div Sept. 29. See BRMK Dividend Scorecard, Yield Chart, & Dividend Growth.Seeking Alpha • Aug 30
Broadmark Realty Capital: Great Value, But Expect A Dividend Cut
Summary BRMK is a minimally leveraged mREIT trading at a 10% discount to TBV. Due to slowing loan book growth, I do not foresee the dividend being sustainable. Even with a dividend cut of 24%, the yield would be ~9% and will provide long-term double-digit returns. The Company I am initiating coverage on Broadmark Realty Trust (BRMK) as it has been at a compelling valuation over the past few months although it is not without risks. BRMK has been around since 2010 but is fairly new to the capital markets as it issued its IPO in 2019. BRMK is an mREIT which I'm not usually a fan of as I believe it takes incredible skill manage interest rate risk to not have material adverse changes in NAV. BRMK is not an exception to this, but less exposed (this will be discussed further in this article). BRMK is considered a "hard money lender" to real estate developers who urgently require capital. The company is essentially a private equity versus cash flow lender as it focuses on the collateral (what it can realize in the event of default) versus business cash flows which you would see with a chartered bank. Loan sizes do not typically exceed $75MM and are short-term as they don't exceed 18 months. Supplemental Earnings Presentation Second Quarter 2022 (Broadmark Realty Capital Inc.) As a result of this lending being higher risk than traditional commercial real estate lending, interests rates are between 10-12% before underwriting fees are even taken into account. As a result BRMK's weighted average all in yield often comes in around ~13%. In addition LTV on properties typically don't exceed 70% with the Q2 2022 weighted average LTV at ~60%. Loans are also 100% senior secured. Supplemental Earnings Presentation Second Quarter 2022 (Broadmark Realty Capital Inc.) BRMK is diversified throughout the USA with loans in 19 states, although the three largest states account for 56% of total outstanding loans which are Washington, Texas, and Colorado. Residential and multi-family housing account for 51% of the portfolio. Supplemental Earnings Presentation Second Quarter 2022 (Broadmark Realty Capital Inc.) Supplemental Earnings Presentation Second Quarter 2022 (Broadmark Realty Capital Inc.) BRMK has only produced $12MM in losses from a total historical portfolio of $3.8 Billion, which comes to around 0.3%. As of Q2 2022 there were 37 loans in default which account for $248MM in total commitments. The weighted average LTV on these properties is 85%. As a result of stable land prices I don't expect to see major principal losses on these loans. In fact, BRMK sold a foreclosed property at $0.7MM above carrying value which was on their Sage Creek property. Supplemental Earnings Presentation Second Quarter 2022 (Broadmark Realty Capital Inc.) We are all well aware of the recent increases in interest rates by the Fed to combat inflation and are likely to continue their hawkish stance. This has led to a dramatic reduction in the market capitalization of banks and mREITs. BRMK has the lowest debt equity ratio of all mREITs at less than 10% which is $100MM of senior unsecured notes. Interest on the notes accrues at the fixed rate of 5.0% per annum. In addition, the short-term financing model makes them less exposed to interest rate risk. Therefore, BRMK is much less exposed to rising interest rates than its mREIT and bank counterparts. Supplemental Earnings Presentation Second Quarter 2022 (Broadmark Realty Capital Inc.) Outlook The slides from the Q2 2022 investor presentation make BRMK look like the greatest company since Apple (AAPL). The stock is not without risk which is why it trades at a hefty 12% dividend yield and a 10% discount to TBV which is among the cheapest it has traded at since its IPO. Supplemental Earnings Presentation Second Quarter 2022 (Broadmark Realty Capital Inc.) BRMK Price to Tangible Book Value data by YCharts Overall I would argue this is a very competent management team that are good stewards of capital but for one major fault which is their decisions when it comes to returning capital to shareholders via dividends. Don't get me wrong, this is why I invest, but like most investors I get nervous when it's just being recycled back to me and it depleting BV. BRMK Book Value (Quarterly) data by YCharts Distributable earnings is the preferred measure to assess dividend coverage rather than basic net income as it accounts for non-cash expenses such as stock based compensation, provision for credit loss, and impairment charges. Either way, BRMK has failed to produce enough income on a quarterly basis to fully cover their $0.07/month dividend with the payout ratio reaching its highest level of 131% at Q2 2022. BRMK Payout Ratio data by YCharts My thoughts on why management has chosen not to cut back on the dividend is threefold. One, which ties into my second point is BRMK realized a $1.1MM real estate management expense in Q2 2022 which was much higher than previous quarters. This expense was as a result of moving ~$30MM in loans from mortgage receivables to owned real estate (REO). Under GAAP accounting once this occurs R&M expenses can no longer be capitalized but have to be expensed in the period. This expense was irregularly high and will be recouped when the property is sold and in its absence would add back $0.01/share in quarterly income. This is would only bring the payout ratio down to 123% however. Supplemental Earnings Presentation Second Quarter 2022 (Broadmark Realty Capital Inc.) Two, as result of stable real estate prices, BRMK likely expects to realize at least carrying value on the REO properties as they did on their Sage Creek property. This assumption is likely reasonable and likely under states BV as these properties account for 7% of total assets. Third, current liquidity of $171 million between cash, short-term investments, and the LOC could cover the dividend payment more than one year. As a shareholder I would prefer to see the excess liquidity go towards growing the loan book and reap the earnings from the assets. The question isn't if the dividend gets cut but when. New loan originations have been on a steep decline since 2021 YE and at Q2 2022 barely covered the portfolio runoff. This is a result of slowing housing starts in the U.S. which have reached the lowest point since July 2020 which is looking like the beginning of the pain that rising interest rates will inflict on this market. It would seem the only way to increase earnings is to raise rates or charge higher fees and there is some room to do this with contractual defaults at only 15% of the total book, but don't forget that the highest level of principal was moved into default in Q2 since the pandemic so there is only so much room to paddle before the shore arrives. There is also no guarantee they can keep realizing carrying value on these properties if the housing market begins to crack.Seeking Alpha • Aug 08
Broadmark Realty Capital Q2 earnings miss in backdrop of rising yields, inflation
Broadmark Realty Capital (NYSE:BRMK) Q2 earnings came in worse-than-expected Monday as the mortgage REIT remained "selective and disciplined with our underwriting" in a backdrop of rising yields and persistently high inflation, said CEO Brain Ward in a statement. Shares of BRMK, meanwhile, edged up 0.3% in after-hours trading. Distributable EPS of $0.16 at the end of June missed the average analyst estimate of $0.17 and decreased from $0.18 at June 30, 2021. Revenue of $28.5M also fell short of the consensus of $30M and fell from $29.2M a year ago, driven by a slump in fee income. Q2 net provision for credit losses jumped to $2.7M from $58K in Q2 2021. Earlier, Broadmark Realty Capital Q2 originations and amendments were $196.7M.Seeking Alpha • Jul 18
Broadmark Realty Capital declares $0.07 dividend
Broadmark Realty Capital (NYSE:BRMK) declares $0.07/share monthly dividend, in line with previous. Forward yield 12.44% Payable Aug. 15; for shareholders of record July 29; ex-div July 28. See BRMK Dividend Scorecard, Yield Chart, & Dividend Growth.Seeking Alpha • Jun 27
Broadmark Realty Is Reasonably Priced, Even With A Lower Dividend
BRMK is a hard-money lender REIT with operations across the US and a $1 billion loan book. The company has negligible leverage, with 90% of its loan book financed by equity. The company has been paying a high dividend that does not seem sustainable. The higher interest rate environment puts the company at risk of higher default rates and loan book contraction. However, even under a depressed scenario, the company can still pay 8%.Seeking Alpha • May 27
Broadmark: We Would Welcome A Dividend Cut
Broadmark continues to deal with the COVID-19 fallout. The dividend coverage has continued to weaken. A focus on preservation of book value would send the right message to the markets. We would welcome a dividend cut.Seeking Alpha • May 16
Broadmark Realty Capital: Double-Digit Dividend Yield Is Unsustainable
Broadmark Realty Capital’s double-digit dividend yield looks unsustainable. A higher payout ratio combined with lower earnings forecasts will force the trust to reduce its dividend. The rate hikes will make market fundamentals more challenging and put more pressure on its cash allocation plans in the quarters to come.Seeking Alpha • Mar 08
Broadmark Realty Capital: 10.6% Yield On This Monthly Payer
Broadmark has sold off with the rest of the market in the last couple months, driving the yield up to 10.6%. Shares currently trade at 11x earnings, which is below the average multiple of 13.9x. Broadmark will have to grow the loan portfolio to avoid a dividend cut in 2022, but the company has a consistent history of portfolio growth going back to 2014. Shares are a steal near $8 and the risk/reward is skewed to the upside.Seeking Alpha • Mar 02
Broadmark: A Main Street Capital In The Making
Broadmark has had a difficult public market career. That was primarily a timing issue, and we believe the company can still deliver good adjusted returns. The recent drop set up a great entry point.Seeking Alpha • Dec 27
Broadmark Realty Capital: The Most Interesting 9% Yield The Market Has To Offer
Broadmark is a small-cap hard money lender that is well diversified by property type as well as geography. Broadmark’s rock solid balance sheet with zero debt and ample liquidity differentiate it from the rest of the mREIT sector. 12.8x earnings and a 8.8% dividend yield paid monthly make Broadmark a fantastic candidate for dividend reinvestment. Investors should keep an eye on the payout ratio, which is over 100%. In my opinion, this is a temporary issue that will not lead to a dividend cut.Seeking Alpha • Dec 18
Broadmark Realty: Rare 9% Yield In A Low Rate World
Broadmark Realty has seen material share price weakness in recent weeks. Meanwhile, it carries no debt on the balance sheet and maintains strong liquidity. It's also seeing strong loan origination volumes and management is making progress towards resolving defaults from last year.Analysis Article • Oct 21
Is Now The Time To Put Broadmark Realty Capital (NYSE:BRMK) On Your Watchlist?
Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story...Seeking Alpha • Oct 12
Broadmark Realty Capital: Unsustainable Dividend Policy Without Loan Portfolio Growth
Broadmark doesn’t seem to have a sustainable dividend policy. Our valuation points to a downside vs current market value. We think Broadmark has potential to reshape its business and afford to sustain its dividend policy should it succeed in increasing its loan portfolio.Seeking Alpha • Aug 13
Why I'm Loading Up On 8%-Yielding Broadmark Realty
Broadmark Realty has a strong track record of prudent portfolio management. It's executing well in the current environment, and has a strong near- to medium-term growth runway. The post-Q2 earnings dip creates a buying opportunity. I also highlight the dividend, balance sheet, and valuation.Seeking Alpha • Jun 27
7% Yield, No Debt: Broadmark Realty Is Still Cheap
Broadmark Realty is a commercial mortgage REIT with a strategic focus on residential properties, which are high in demand. It's lost just 0.2% of its principal since inception and carries no debt on its balance sheet. Management has high insider ownership of the company, and BRMK maintains plenty of liquidity to capitalize on new opportunities.Analysis Article • Mar 26
Here's Why We Think Broadmark Realty Capital (NYSE:BRMK) Is Well Worth Watching
Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story...Earnings and Revenue Growth Forecasts
| Date | Revenue | Earnings | Free Cash Flow | Cash from Op | Avg. No. Analysts |
|---|---|---|---|---|---|
| 12/31/2024 | 111 | 48 | N/A | N/A | 2 |
| 12/31/2023 | 101 | 28 | N/A | N/A | 4 |
| 3/31/2023 | 56 | -130 | 44 | 44 | N/A |
| 12/31/2022 | 62 | -116 | 57 | 57 | N/A |
| 9/30/2022 | 94 | 59 | 62 | 62 | N/A |
| 6/30/2022 | 108 | 78 | 61 | 62 | N/A |
| 3/31/2022 | 113 | 80 | 62 | 62 | N/A |
| 12/31/2021 | 111 | 82 | 64 | 64 | N/A |
| 9/30/2021 | 109 | 83 | 64 | 65 | N/A |
| 6/30/2021 | 115 | 87 | 68 | 68 | N/A |
| 3/31/2021 | 110 | 84 | 62 | 62 | N/A |
| 12/31/2020 | 116 | 90 | 64 | 64 | N/A |
| 9/30/2020 | 116 | 60 | 44 | 44 | N/A |
| 6/30/2020 | 97 | 49 | 40 | 40 | N/A |
| 3/31/2020 | 87 | 47 | 41 | 41 | N/A |
| 12/31/2019 | 96 | 32 | -49 | 34 | N/A |
| 9/30/2019 | 50 | 49 | 49 | 49 | N/A |
| 6/30/2019 | 43 | 43 | 43 | 43 | N/A |
| 3/31/2019 | 36 | 35 | 36 | 36 | N/A |
| 12/31/2018 | 30 | 29 | 29 | 29 | N/A |
| 12/31/2017 | 13 | 13 | -60 | -60 | N/A |
| 12/31/2016 | 6 | 6 | N/A | -25 | N/A |
Analyst Future Growth Forecasts
Earnings vs Savings Rate: BRMK is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2.1%).
Earnings vs Market: BRMK is forecast to become profitable over the next 3 years, which is considered above average market growth.
High Growth Earnings: BRMK is expected to become profitable in the next 3 years.
Revenue vs Market: BRMK's revenue (27.9% per year) is forecast to grow faster than the US market (8% per year).
High Growth Revenue: BRMK's revenue (27.9% per year) is forecast to grow faster than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: Insufficient data to determine if BRMK's Return on Equity is forecast to be high in 3 years time
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Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2023/06/01 19:23 |
| End of Day Share Price | 2023/05/30 00:00 |
| Earnings | 2023/03/31 |
| Annual Earnings | 2022/12/31 |
Data Sources
The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.
| Package | Data | Timeframe | Example US Source * |
|---|---|---|---|
| Company Financials | 10 years |
| |
| Analyst Consensus Estimates | +3 years |
|
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| Market Prices | 30 years |
| |
| Ownership | 10 years |
| |
| Management | 10 years |
| |
| Key Developments | 10 years |
|
* Example for US securities, for non-US equivalent regulatory forms and sources are used.
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.
Analysis Model and Snowflake
Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.
Learn about the world class team who designed and built the Simply Wall St analysis model.
Industry and Sector Metrics
Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.
Analyst Sources
Broadmark Realty Capital Inc. is covered by 5 analysts. 4 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.
| Analyst | Institution |
|---|---|
| Matthew Howlett | B. Riley Securities, Inc. |
| Eric Hagen | BTIG |
| Steven Delaney | Citizens JMP Securities, LLC |