Analyzing Hatteras Financial Corp. (HTS) & Capital Trust (BXMT)
Hatteras Financial Corp. (NYSE: HTS) and Capital Trust (NYSE:BXMT) are both financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.
This is a breakdown of current ratings and target prices for Hatteras Financial Corp. and Capital Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hatteras Financial Corp.||0||0||0||0||N/A|
Capital Trust has a consensus price target of $33.50, suggesting a potential upside of 5.25%. Given Capital Trust’s higher possible upside, analysts clearly believe Capital Trust is more favorable than Hatteras Financial Corp..
Valuation & Earnings
This table compares Hatteras Financial Corp. and Capital Trust’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hatteras Financial Corp.||N/A||N/A||N/A||$0.31||52.55|
|Capital Trust||$298.97 million||10.10||$220.95 million||$2.33||13.66|
Capital Trust has higher revenue and earnings than Hatteras Financial Corp.. Capital Trust is trading at a lower price-to-earnings ratio than Hatteras Financial Corp., indicating that it is currently the more affordable of the two stocks.
This table compares Hatteras Financial Corp. and Capital Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hatteras Financial Corp.||N/A||-16.93%||-1.89%|
Volatility & Risk
Hatteras Financial Corp. has a beta of 0.3, meaning that its stock price is 70% less volatile than the S&P 500. Comparatively, Capital Trust has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500.
Hatteras Financial Corp. pays an annual dividend of $1.80 per share and has a dividend yield of 11.0%. Capital Trust pays an annual dividend of $2.48 per share and has a dividend yield of 7.8%. Hatteras Financial Corp. pays out 580.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Capital Trust pays out 106.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hatteras Financial Corp. has raised its dividend for 3 consecutive years. Hatteras Financial Corp. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
61.3% of Capital Trust shares are owned by institutional investors. 0.9% of Capital Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Capital Trust beats Hatteras Financial Corp. on 11 of the 13 factors compared between the two stocks.
Hatteras Financial Corp. Company Profile
Hatteras Financial Corp. is an externally managed mortgage real estate investment trust (REIT) that invests in single-family residential mortgage real estate assets, such as mortgage-backed security (MBS), mortgage servicing right (MSR), residential mortgage loans and other financial assets. MBS are pass-through securities consisting of a pool of mortgage loans. Its primary business is owning and managing agency securities, with a primary focus on adjustable-rate mortgage securities. Its primary investment assets include Agency MBS; other agency issued securities, such as credit-risk transfer bonds; MSR; non-agency securities; residential mortgage loans, and other real estate related assets as permitted by its investment guidelines and REIT requirements. Its business operations consist of the Hatteras Financial Corp., Onslow Bay Financial LLC, First Winston Securities, Inc. and Wind River TRS LLC. It is externally managed and advised by its manager, Atlantic Capital Advisors LLC.
Capital Trust Company Profile
Blackstone Mortgage Trust, Inc. is a holding company. The Company conducts its operations as a real estate investment trust for the United States federal income tax purposes. The Company originates and purchases senior loans collateralized by properties in North America and Europe. The Company’s business is focused on originating or acquiring senior, floating rate mortgage loans that are secured by a first priority mortgage on commercial real estate assets primarily in the office, lodging, retail, residential and industrial sectors. These investments may be in the form of whole loans or may also include pari passu participations within mortgage loans. It directly originates, co-originates and acquires debt instruments in conjunction with acquisitions, refinancings and recapitalizations of commercial real estate. The Company’s manager is BXMT Advisors L.L.C.
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