Head-To-Head Analysis: Starwood Property Trust (STWD) and Great Ajax Corp. (AJX)
Starwood Property Trust (NYSE: STWD) and Great Ajax Corp. (NYSE:AJX) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.
Starwood Property Trust pays an annual dividend of $1.92 per share and has a dividend yield of 8.8%. Great Ajax Corp. pays an annual dividend of $1.20 per share and has a dividend yield of 8.6%. Starwood Property Trust pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Great Ajax Corp. pays out 76.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Institutional and Insider Ownership
68.6% of Starwood Property Trust shares are owned by institutional investors. Comparatively, 75.3% of Great Ajax Corp. shares are owned by institutional investors. 2.4% of Starwood Property Trust shares are owned by insiders. Comparatively, 3.8% of Great Ajax Corp. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Starwood Property Trust and Great Ajax Corp.’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Starwood Property Trust||$546.16 million||10.39||$456.67 million||$1.76||12.43|
|Great Ajax Corp.||$50.65 million||4.84||$27.67 million||$1.57||8.87|
Starwood Property Trust has higher revenue and earnings than Great Ajax Corp.. Great Ajax Corp. is trading at a lower price-to-earnings ratio than Starwood Property Trust, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Starwood Property Trust has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, Great Ajax Corp. has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.
This is a summary of current recommendations for Starwood Property Trust and Great Ajax Corp., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Starwood Property Trust||0||1||2||0||2.67|
|Great Ajax Corp.||0||2||2||0||2.50|
Starwood Property Trust presently has a consensus price target of $24.50, suggesting a potential upside of 12.03%. Great Ajax Corp. has a consensus price target of $15.13, suggesting a potential upside of 8.66%. Given Starwood Property Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Starwood Property Trust is more favorable than Great Ajax Corp..
This table compares Starwood Property Trust and Great Ajax Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Starwood Property Trust||55.89%||11.39%||0.69%|
|Great Ajax Corp.||58.46%||10.22%||3.02%|
Starwood Property Trust beats Great Ajax Corp. on 9 of the 15 factors compared between the two stocks.
About Starwood Property Trust
Starwood Property Trust, Inc. is a real estate investment trust. The Company operates through three business segments: Real estate lending (the Lending Segment), which engages primarily in originating, acquiring, financing and managing commercial first mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), residential mortgage-backed securities, and other real estate and real estate-related debt investments; Real estate investing and servicing (the Investing and Servicing Segment), which includes a servicing business in the United States that manages and works out problem assets; an investment business that selectively acquires and manages unrated, investment grade and non-investment grade rated CMBS, and a mortgage loan business, and Real estate property (the Property Segment), which engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties.
About Great Ajax Corp.
Great Ajax Corp. is an externally managed real estate company. The Company is focused on acquiring, investing in and managing a portfolio of re-performing and non-performing mortgage loans secured by single-family residences and single-family properties. Its segment is focused on non-performing mortgages and re-performing mortgages. It also invests in loans secured by multi-family residential and commercial mixed use retail/residential properties, as well as in the properties directly. It also holds real estate-owned properties (REO) acquired upon the foreclosure or other settlement of its owned non-performing loans, as well as through outright purchases. It is managed by Thetis Asset Management LLC, an affiliated entity. Its mortgage loans and other real estate assets are serviced by Gregory Funding LLC, an affiliated entity. The Company conducts its business through its operating partnership, Great Ajax Operating Partnership L.P.
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