Blackstone Mortgage Trust (NYSE: BMXT) stock has one of the highest dividends yields in Wall Street. It has a dividend yield of 13.6%, higher than the S&P 500 return of 1.35%, and the iShares Core High Dividend ETF (HDV), which yields about 3.5%.

Blackstone Mortgage Trust is a leading Real Estate Investment Trust (REIT) that has a portfolio of over $21 billion. It is an externally managed company that is run by BXMT, a company owned by Blackstone, a company with over $1 trillion in assets.

The company provides its services by originating loans that are secured by institutional quality real estate projects. Most of its loans are in the US office, multifamily, hospitality, and industrial sectors. It has a presence in most areas in the United States.

Blackstone Mortgage, like most REITS, especially those with exposure to the office market, is not doing well. Interest rates have surged to the highest point in over two decades while the occupancy rate has slumped to a record low. There is also a lingering fear about a major wall of maturities.

BXMT has defended itself, noting that 92% of its loans were performing while 99.5% of the interest it received in Q1 was current. It has also noted that it has strong liquidity with access to over $1.7 billion, which is substantial compared to its $3.1 billion market cap. 

The company has had to defend itself forcefully after it became a target of Muddy Waters, a short seller. In a report last year, the short seller warned that BXMT would need to slash its dividends in the first half of the year. As a result, its short interest has risen to almost 15%. 

In most cases, Blackstone Mortgage Trust is loved by income-focused investors seeking safe and high yields. They are usually attracted to its high dividend yield, which is higher than most assets, including short-term treasuries. 

However, in most cases, high-yield investments are not always the best ones in terms of returns. I have covered this several times before, including in my comparison of TSLY and Tesla and SPY and JEPI.

The same is happening with Blackstone Mortage, which has a long history of underperforming the market. Data shows that the BXMT has had a total return of minus 11.90% this year while the SPDR S&P 500 (SPY) and Invesco QQQ (QQQ) have risen by 9% and 7.65%, respectively.

The same has happened in the long term as the total return plunged by 19.80% in the past five years while SPY and QQQ have jumped by over 91% and 140%, respectively. 

BXMT vs SPY vs QQQ total returns

Past performance is not always an indicator of what to expect in the future. However, using historical data can help you in your decision-making. 

The benefit of investing in these funds is that they are highly diversified and have a long track record of doing well even after the occasional dips. They all recovered after plunging in March 2020 after the Covid-19 pandemic started. Also, they have done well after other major meltdowns like the dot com bubble and the Global Housing Crisis.

BXMT, on the other hand, has come under intense pressure over the years. It soared to $40 in February 2007 and then tumbled to $0.744 during the 2008/9 crisis. It has struggled to retest its all-time high since then.

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