New Residential Investment Corp. (NYSE: NRZ) and Apollo Residential Mortgage (NYSE:AMTG) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.

Risk and Volatility

New Residential Investment Corp. has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Apollo Residential Mortgage has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.

Insider and Institutional Ownership

48.1% of New Residential Investment Corp. shares are held by institutional investors. 4.0% of New Residential Investment Corp. shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares New Residential Investment Corp. and Apollo Residential Mortgage’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
New Residential Investment Corp. $1.08 billion 5.00 $504.45 million $3.09 5.67
Apollo Residential Mortgage N/A N/A N/A ($0.93) N/A

New Residential Investment Corp. has higher revenue and earnings than Apollo Residential Mortgage. Apollo Residential Mortgage is trading at a lower price-to-earnings ratio than New Residential Investment Corp., indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for New Residential Investment Corp. and Apollo Residential Mortgage, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Residential Investment Corp. 0 2 5 0 2.71
Apollo Residential Mortgage 0 0 0 0 N/A

New Residential Investment Corp. currently has a consensus target price of $17.63, suggesting a potential upside of 0.66%.

Profitability

This table compares New Residential Investment Corp. and Apollo Residential Mortgage’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Residential Investment Corp. 60.06% 19.38% 3.99%
Apollo Residential Mortgage 56.35% 10.11% 2.60%

Dividends

New Residential Investment Corp. pays an annual dividend of $2.00 per share and has a dividend yield of 11.4%. Apollo Residential Mortgage does not pay a dividend. New Residential Investment Corp. pays out 64.7% of its earnings in the form of a dividend. New Residential Investment Corp. has increased its dividend for 2 consecutive years and Apollo Residential Mortgage has increased its dividend for 3 consecutive years.

Summary

New Residential Investment Corp. beats Apollo Residential Mortgage on 10 of the 12 factors compared between the two stocks.

New Residential Investment Corp. Company Profile

New Residential Investment Corp. is a real estate investment trust (REIT). The Company focuses on investing in, and managing, investments related to residential real estate. The Company’s segments include investments in excess mortgage servicing rights (Excess MSRs); investments in mortgage servicing rights (MSRs); investments in servicer advances; investments in real estate securities; investments in residential mortgage loans; investments in consumer loans, and corporate. Its portfolio includes mortgage servicing related assets, residential mortgage backed securities (RMBS), residential mortgage loans and other investments. The Company’s servicing related assets include its investments in Excess MSRs, MSRs and servicer advances. The Company invests in agency RMBS and non-agency RMBS. The Company’s other investments consist of consumer loans.

Apollo Residential Mortgage Company Profile

Apollo Residential Mortgage, Inc. is a holding company that conducts its business primarily through ARM Operating, LLC and other operating subsidiaries. The Company is primarily engaged in the business of investing in residential mortgage assets in the United States. The Company seeks to generate risk-adjusted returns from its assets to its stockholders over the long term, primarily through dividend distributions and secondarily through capital appreciation. The Company’s portfolio consists of agency residential mortgage-backed securities (RMBS), non-Agency RMBS; securitized mortgage loans, and other mortgage and mortgage related investment securities and other mortgage related investments. The Company may invest in a range of other residential mortgage and mortgage-related assets. The Company is externally managed and advised by ARM Manager, LLC, an indirect subsidiary of Apollo Global Management, LLC.

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