Communications Sales & Leasing,Inc. (NASDAQ: UNIT) and Anworth Mortgage Asset Corporation (NYSE:ANH) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, institutional ownership and risk.

Volatility and Risk

Communications Sales & Leasing,Inc. has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500. Comparatively, Anworth Mortgage Asset Corporation has a beta of 0.27, meaning that its share price is 73% less volatile than the S&P 500.

Earnings & Valuation

This table compares Communications Sales & Leasing,Inc. and Anworth Mortgage Asset Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Communications Sales & Leasing,Inc. $831.65 million 3.88 $681.10 million ($0.32) -57.50
Anworth Mortgage Asset Corporation $83.05 million 7.12 $61.46 million $0.63 9.62

Communications Sales & Leasing,Inc. has higher revenue and earnings than Anworth Mortgage Asset Corporation. Communications Sales & Leasing,Inc. is trading at a lower price-to-earnings ratio than Anworth Mortgage Asset Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Communications Sales & Leasing,Inc. and Anworth Mortgage Asset Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Communications Sales & Leasing,Inc. -5.41% N/A -1.29%
Anworth Mortgage Asset Corporation 44.13% 8.83% 0.96%

Insider & Institutional Ownership

68.2% of Communications Sales & Leasing,Inc. shares are owned by institutional investors. Comparatively, 56.2% of Anworth Mortgage Asset Corporation shares are owned by institutional investors. 0.4% of Communications Sales & Leasing,Inc. shares are owned by company insiders. Comparatively, 1.9% of Anworth Mortgage Asset Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Communications Sales & Leasing,Inc. and Anworth Mortgage Asset Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Communications Sales & Leasing,Inc. 0 1 8 1 3.00
Anworth Mortgage Asset Corporation 0 1 0 0 2.00

Communications Sales & Leasing,Inc. presently has a consensus target price of $30.25, indicating a potential upside of 64.40%. Anworth Mortgage Asset Corporation has a consensus target price of $6.00, indicating a potential downside of 0.99%. Given Communications Sales & Leasing,Inc.’s stronger consensus rating and higher possible upside, analysts plainly believe Communications Sales & Leasing,Inc. is more favorable than Anworth Mortgage Asset Corporation.

Dividends

Communications Sales & Leasing,Inc. pays an annual dividend of $2.40 per share and has a dividend yield of 13.0%. Anworth Mortgage Asset Corporation pays an annual dividend of $0.60 per share and has a dividend yield of 9.9%. Communications Sales & Leasing,Inc. pays out -750.0% of its earnings in the form of a dividend. Anworth Mortgage Asset Corporation pays out 95.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Anworth Mortgage Asset Corporation has increased its dividend for 2 consecutive years. Communications Sales & Leasing,Inc. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Communications Sales & Leasing,Inc. beats Anworth Mortgage Asset Corporation on 10 of the 17 factors compared between the two stocks.

About Communications Sales & Leasing,Inc.

Uniti Group Inc., formerly Communications Sales & Leasing, Inc., is an internally managed real estate investment trust engaged in the acquisition and construction of infrastructure in the communications industry. The Company focuses on acquiring and constructing fiber optic broadband networks, wireless communications towers, copper and coaxial broadband networks and data centers. It operates in four segments: Leasing, Fiber Infrastructure, Towers and Consumer Competitive Local Exchange Carrier (Consumer CLEC). The Leasing segment includes Uniti Leasing. The Fiber Infrastructure segment includes Uniti Fiber business. The Towers segment includes Uniti Towers and its ground lease investments. The Consumer CLEC segment includes Talk America. As of July 3, 2017, the Company and its subsidiaries owned approximately 88,100 fiber network route miles, representing approximately 4.8 million fiber strand miles and approximately 231,900 route miles of copper cable lines across 32 states.

About Anworth Mortgage Asset Corporation

Anworth Mortgage Asset Corporation is a real estate investment trust (REIT). The Company’s investment objective is to provide risk-adjusted total returns to its stockholders over the long-term primarily through dividends and secondarily through capital appreciation. Its strategy is to invest in residential mortgage-backed securities (MBS) (both Agency MBS and Non-Agency MBS), residential mortgage loans and residential rental properties. Its principal business objective is to generate net income for distribution to its stockholders primarily based upon the spread between the interest income on its mortgage assets and its borrowing costs to finance its acquisition of those assets. The Company finances residential mortgage loans through asset-backed securities, which are issued by the consolidated securitization trusts. The Company is engaged in investing in, financing and managing a portfolio of residential mortgage-backed securities and residential mortgage loans.

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