Highlights

  • The trust shows 98.60% one-year basic EPS growth, a P/E of 4.93, PEG of 0.00.
  • Second quarter common shareholder net income was $20,464 thousand against a $2,921 thousand loss.
  • Book value per common share was $14.83 at June 30, against $15.25 at December 31.
  • The trust agreed in June to sell servicing rights on approximately $13.0 billion of UPB.

PennyMac Mortgage Investment Trust (NYSE:PMT) reported second quarter 2026 net income attributable to common shareholders of $20,464 thousand, and the undervalued growth stock figures read 98.60% one-year growth in basic earnings per share, a trailing twelve-month P/E of 4.93 and an expected-basis PEG of 0.00, with shares trading at USD 7.20 on October 28, 2026, down 0.76%. In its latest disclosures, the externally managed specialty finance company agreed in June to sell a portfolio of conventional mortgage servicing rights, held its second quarter earnings call on July 29, and filed its quarterly report on August 4.

Based in Westlake Village, California, and organized in Maryland, PennyMac Mortgage Investment Trust is a specialty finance company that invests in mortgage-related assets, including mortgage servicing rights, mortgage-backed securities and credit risk transfer arrangements created through its aggregation and securitization activities. It is externally managed by Pennymac Capital Management, LLC, and operates three segments: credit sensitive strategies, interest rate sensitive strategies, and aggregation and securitization, formerly called correspondent production.

Growth: Second Quarter Net Income, Segments and Servicing Fees

Net income was $30,919 thousand in the second quarter against $7,534 thousand a year earlier. Net income attributable to common shareholders was $20,464 thousand against a loss of $2,921 thousand, and $34,625 thousand for the six months against a loss of $3,696 thousand. Basic and diluted earnings per common share were $0.23 against a loss of $0.04 for the quarter.

Net investment income was $72,729 thousand against $70,201 thousand. Pretax income was $16,820 thousand against $17,006 thousand, with a benefit from income taxes of $14,099 thousand against a provision of $9,472 thousand. The company said results increased by $23.4 million, reflecting decreased income tax expense and increased gains on mortgage servicing rights, partially offset by losses on mortgage-backed securities.

Net loan servicing fees were $40,041 thousand against $23,947 thousand. Segment pretax income was $11,248 thousand for credit sensitive strategies against $21,834 thousand, $8,991 thousand for interest rate sensitive strategies against a loss of $4,888 thousand, and $11,129 thousand for aggregation and securitization.

Valuation: P/E of 4.93, PEG of 0.00 and Management Commentary

The P/E ratio of 4.93 is measured on trailing twelve-month earnings, and the PEG ratio of 0.00 on an expected basis. Annualized return on average common shareholders' equity was 6.2%. Book value per common share was $14.83 at June 30, 2026 against $15.25 at December 31, 2025, and total shareholders' equity was $1,853,374 thousand against $1,887,331 thousand.

On the second quarter call, Chairman and Chief Executive Officer David Spector said earnings excluding market driven value changes have been below the dividend level for the past several quarters, and described an average run rate return of $0.33 per quarter for the next year, up from $0.31. Chief Financial Officer Daniel Perotti said the company expects taxable income to be sufficient to cover the common dividend at its current level in coming periods.

Capital and Balance Sheet: Financing, Dividends and Repurchase Capacity

Assets sold under agreements to repurchase were $8,395,226 thousand. Asset-backed financings of variable interest entities at fair value were $11,358,602 thousand against $7,789,303 thousand at December 31, 2025. Unsecured senior notes were $685,276 thousand against $1,028,300 thousand, after repayment of $345,000 thousand in the six months. The company said it was in compliance with its debt covenants, which include a minimum tangible net worth of $1.25 billion, at June 30, 2026.

Dividends per common share were $0.40 for the quarter, and the company paid $69,736 thousand of common dividends in the six months. It made no share repurchases in the period; $73.4 million remained available under a $500 million authorization, and no shares have been sold under its $200 million at-the-market program.

Disclosed Risks and Outlook: Litigation, Rates and the MSR Sale

A putative class action filed June 14, 2024 by a holder of Series A and Series B preferred shares alleges unfair acts in replacing the LIBOR dividend rate with a fixed rate, and seeks injunctive relief and damages. The company believes the case is without merit, does not consider a loss probable or reasonably estimable, and has recorded no accrual; an appeal is pending.

The company disclosed that interest rate volatility, a possible rise in short-term rates later in 2026, and economic uncertainty could raise mortgage delinquencies, affect credit sensitive assets and increase representation and warranty losses.

Management said it is reducing exposure to mortgage servicing rights and increasing exposure to subordinate securities, and expects the agreed sale to close in August 2026. It expects to purchase all of PLS' non-Agency correspondent loans and none of its conventional conforming loans in the third quarter of 2026, and on the call said it expects about 30 securitizations in 2026.