MFA Financial (NYSE: MFA) is one of 38 publicly-traded companies in the “Mortgage REITs” industry, but how does it contrast to its rivals? We will compare MFA Financial to similar businesses based on the strength of its risk, profitability, valuation, earnings, institutional ownership, analyst recommendations and dividends.

Institutional and Insider Ownership

80.1% of MFA Financial shares are owned by institutional investors. Comparatively, 57.9% of shares of all “Mortgage REITs” companies are owned by institutional investors. 0.9% of MFA Financial shares are owned by company insiders. Comparatively, 3.3% of shares of all “Mortgage REITs” companies 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.

Earnings and Valuation

This table compares MFA Financial and its rivals gross revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
MFA Financial $376.15 million N/A 11.15
MFA Financial Competitors $626.30 million $243.53 million 1.51

MFA Financial’s rivals have higher revenue and earnings than MFA Financial. MFA Financial is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Dividends

MFA Financial pays an annual dividend of $0.80 per share and has a dividend yield of 9.2%. MFA Financial pays out 102.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Mortgage REITs” companies pay a dividend yield of 10.1% and pay out 80.5% of their earnings in the form of a dividend. MFA Financial lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for MFA Financial and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MFA Financial 0 2 2 0 2.50
MFA Financial Competitors 110 838 842 31 2.44

MFA Financial currently has a consensus target price of $8.50, indicating a potential downside of 2.30%. As a group, “Mortgage REITs” companies have a potential upside of 2.81%. Given MFA Financial’s rivals higher possible upside, analysts plainly believe MFA Financial has less favorable growth aspects than its rivals.

Profitability

This table compares MFA Financial and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MFA Financial 61.94% 10.12% 2.58%
MFA Financial Competitors 49.20% 10.70% 2.78%

Volatility & Risk

MFA Financial has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, MFA Financial’s rivals have a beta of 0.71, suggesting that their average stock price is 29% less volatile than the S&P 500.

Summary

MFA Financial rivals beat MFA Financial on 9 of the 14 factors compared.

About MFA Financial

MFA Financial, Inc. is engaged in the real estate finance business. The Company’s subsidiaries invest in residential mortgage assets, including Non-Agency mortgage-backed securities (MBS), Agency MBS, residential whole loans and credit risk transfer (CRT) securities. The Company’s Non-Agency MBS portfolio primarily consists of Legacy Non-Agency MBS and 3 Year Step-up securities. In addition to Non-Agency MBS investments, the Company invests in re-performing and non-performing residential whole loans through its interests in certain consolidated trusts. The mortgages collateralizing its Agency MBS portfolio are predominantly Hybrids, 15-year fixed-rate mortgages and adjustable-rate mortgages (ARMs).

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