InfraREIT (NYSE: HIFR) and Anworth Mortgage Asset Corporation (NYSE:ANH) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Valuation & Earnings

This table compares InfraREIT and Anworth Mortgage Asset Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
InfraREIT $184.70 million 5.25 $160.52 million $1.20 18.47
Anworth Mortgage Asset Corporation $83.05 million 7.21 $61.46 million $0.63 9.75

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

Risk & Volatility

InfraREIT has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Comparatively, Anworth Mortgage Asset Corporation has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500.

Profitability

This table compares InfraREIT and Anworth Mortgage Asset Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
InfraREIT 28.31% 6.28% 3.13%
Anworth Mortgage Asset Corporation 44.13% 8.83% 0.96%

Analyst Ratings

This is a breakdown of current ratings and target prices for InfraREIT and Anworth Mortgage Asset Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
InfraREIT 0 2 1 0 2.33
Anworth Mortgage Asset Corporation 0 1 0 0 2.00

InfraREIT currently has a consensus target price of $22.00, indicating a potential downside of 0.72%. Anworth Mortgage Asset Corporation has a consensus target price of $6.00, indicating a potential downside of 2.28%. Given InfraREIT’s stronger consensus rating and higher probable upside, equities research analysts clearly believe InfraREIT is more favorable than Anworth Mortgage Asset Corporation.

Dividends

InfraREIT pays an annual dividend of $1.00 per share and has a dividend yield of 4.5%. Anworth Mortgage Asset Corporation pays an annual dividend of $0.60 per share and has a dividend yield of 9.8%. InfraREIT pays out 83.3% 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 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. InfraREIT has increased its dividend for 2 consecutive years.

Institutional and Insider Ownership

83.8% of InfraREIT shares are held by institutional investors. Comparatively, 56.2% of Anworth Mortgage Asset Corporation shares are held by institutional investors. 28.0% of InfraREIT shares are held by insiders. Comparatively, 1.9% of Anworth Mortgage Asset Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

InfraREIT beats Anworth Mortgage Asset Corporation on 13 of the 17 factors compared between the two stocks.

InfraREIT Company Profile

InfraREIT, Inc. is a real estate investment trust. The Company is engaged in owning and leasing rate-regulated transmission and distribution (T&D) assets in Texas. It leases its T&D assets to Sharyland Utilities, L.P. Its assets are located in the Texas Panhandle near Amarillo, the Permian Basin in and around Stanton, Central Texas around Brady, Northeast Texas in and around Celeste and South Texas near McAllen. As of December 31, 2016, its T&D assets consisted of approximately 54,000 electricity delivery points, approximately 815 circuit miles of transmission lines, approximately 40,500 circuit miles of distribution lines, 57 substations and a 300 megawatt high-voltage direct current (DC) Tie between Texas and Mexico (Railroad DC Tie). As of December 31, 2016, its T&D assets in each of its leases included S/B/C Lease, McAllen Lease, competitive renewable energy zone (CREZ) Lease, Stanton Transmission Loop Lease and Electric Reliability Council of Texas (ERCOT) Transmission Lease.

Anworth Mortgage Asset Corporation Company Profile

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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