Head to Head Analysis: Federal Agricultural Mortgage (AGM) and INTL Fcstone (INTL)

Federal Agricultural Mortgage (NYSE: AGM) and INTL Fcstone (NASDAQ:INTL) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Profitability

This table compares Federal Agricultural Mortgage and INTL Fcstone’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Federal Agricultural Mortgage 23.05% 14.81% 0.42%
INTL Fcstone 0.02% 1.41% 0.10%

Dividends

Federal Agricultural Mortgage pays an annual dividend of $1.44 per share and has a dividend yield of 1.8%. INTL Fcstone does not pay a dividend. Federal Agricultural Mortgage pays out 19.4% of its earnings in the form of a dividend. Federal Agricultural Mortgage has increased its dividend for 6 consecutive years.

Volatility and Risk

Federal Agricultural Mortgage has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500. Comparatively, INTL Fcstone has a beta of 1.71, meaning that its share price is 71% more volatile than the S&P 500.

Earnings and Valuation

This table compares Federal Agricultural Mortgage and INTL Fcstone’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Federal Agricultural Mortgage $332.37 million 2.59 $77.33 million $7.44 10.89
INTL Fcstone $29.42 billion 0.03 $6.40 million $0.31 139.84

Federal Agricultural Mortgage has higher earnings, but lower revenue than INTL Fcstone. Federal Agricultural Mortgage is trading at a lower price-to-earnings ratio than INTL Fcstone, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

63.9% of Federal Agricultural Mortgage shares are held by institutional investors. Comparatively, 64.8% of INTL Fcstone shares are held by institutional investors. 3.8% of Federal Agricultural Mortgage shares are held by insiders. Comparatively, 20.5% of INTL Fcstone shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Federal Agricultural Mortgage and INTL Fcstone, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Federal Agricultural Mortgage 0 1 0 0 2.00
INTL Fcstone 0 0 0 0 N/A

Federal Agricultural Mortgage presently has a consensus price target of $86.00, suggesting a potential upside of 6.17%. Given Federal Agricultural Mortgage’s higher probable upside, analysts plainly believe Federal Agricultural Mortgage is more favorable than INTL Fcstone.

Summary

Federal Agricultural Mortgage beats INTL Fcstone on 9 of the 15 factors compared between the two stocks.

About Federal Agricultural Mortgage

Federal Agricultural Mortgage Corporation (Farmer Mac) provides a secondary market for a range of loans made to borrowers in rural America. The Company’s segments include Farm & Ranch, USDA Guarantees, Rural Utilities, Institutional Credit and Corporate. Its secondary market activities are purchasing eligible loans directly from lenders; providing advances against eligible loans by purchasing obligations secured by those loans; securitizing assets and guaranteeing the payment of principal and interest on the resulting securities that represent interests in, or obligations secured by, pools of eligible loans; and issuing long-term standby purchase commitments (LTSPCs) for eligible loans. The loans eligible for the secondary market provided by Farmer Mac include mortgage loans secured by first liens on agricultural real estate, including part-time farms and rural housing (comprising the assets eligible for the Farm & Ranch line of business).

About INTL Fcstone

INTL Fcstone Inc. is a financial services company. The Company provides financial products, and advisory and execution service. The Company operates through five segments: Commercial Hedging, Global Payments, Securities, Physical Commodities, and Clearing and Execution Services (CES). The Commercial Hedging segment serves its commercial clients through its team of risk management consultants. The Global Payments segment provides global payment solutions to banks and commercial businesses, as well as charities and non-governmental organizations and government organizations. The Securities segment provides solutions that facilitate cross-border trading. The Physical Commodities segment consists of its physical precious metals trading and physical agricultural and energy commodity businesses. The CES segment seeks to provide clearing and execution of exchange-traded futures and options for the institutional and trader market segments.

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