PennyMac Mortgage Investment Trust (PMTU): fair value, margin of safety and Wheel Score

Is PMTU undervalued?

PMTU has a margin of safety of 85%: the stock closed at 25.10 on 16 Oct 2026 against a GLS average fair value of 172.24. 5 of the 6 valuation models that produced a number sit above the price. Our screens treat a discount this large as a strong starting point for a cash-secured put, not as a verdict - the fair value is a model output, and a wide gap can mean the models are missing something the market knows.

The 6 models disagree widely: DDM gives 23.54 while GLS Growth gives 426.50. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.

The nightly engine files PMTU under High Growth: revenue and earnings growing fast enough that the growth-based models carry the valuation.

Nine valuation models for PMTU

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

Financial health is weak: PMTU passes 4 of the nine Piotroski tests. Our screens drop the stock at the health rule; a low score is often the reason a stock looks cheap on the valuation models. The GLS Moat score is low at 3.0 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.

Returns on capital are thin or negative - ROIC 0.6%, ROE 6.8%, ROA 0.6% - with debt at 10.12 times equity and negative free cash flow. Debt of 10.12 times equity is on the high side for the sector and is worth checking against the cash flow before treating the stock as a long-term hold.

The dividend yield is high at 23.29% (payout ratio 109%) - a payout above 100% of earnings, which is not covered by profits. A yield this size is often the market's way of pricing a risk to the payout, so the health score and cash flow matter more than usual. Revenue comes mainly from Interest Rate Sensitive Strategies 74%, Credit Sensitive Strategies 26% (quarter Q2 FY2026).

Institutional ownership scores 5/10, insider activity 1/10 and Congressional trading 5/10 on the GLS smart-money scales.

Wheel Score 39: No options

PMTU has no listed options in the nightly snapshot, so there is nothing to sell and the stock cannot be wheeled however good the business; the Wheel Score is capped at 39 and shown as "No options" (39 here). The valuation and quality numbers still apply to owning the shares outright.

Volume runs at 6k shares a day on a market cap of $807M, with a beta of 0.13 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 8 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

PennyMac Mortgage Investment Trust reports earnings on 22 Oct 2026 (after the close) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

Similar stocks in REIT - Mortgage

The 12 companies below are the closest to PennyMac Mortgage Investment Trust by market cap within the REIT - Mortgage industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.

⚖ Compare PMTU with 7 of them   All Real Estate stocks →