Head to Head Comparison: Manhattan Bridge Capital (LOAN) & Dynex Capital (DX)

Manhattan Bridge Capital (NASDAQ: LOAN) and Dynex Capital (NYSE:DX) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Insider & Institutional Ownership

12.0% of Manhattan Bridge Capital shares are owned by institutional investors. Comparatively, 36.2% of Dynex Capital shares are owned by institutional investors. 32.3% of Manhattan Bridge Capital shares are owned by company insiders. Comparatively, 7.1% of Dynex Capital shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Manhattan Bridge Capital pays an annual dividend of $0.44 per share and has a dividend yield of 7.2%. Dynex Capital pays an annual dividend of $0.72 per share and has a dividend yield of 10.4%. Manhattan Bridge Capital pays out 110.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dynex Capital pays out 50.0% of its earnings in the form of a dividend. Dynex Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Manhattan Bridge Capital and Dynex Capital’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Manhattan Bridge Capital $4.65 million 10.64 $2.83 million $0.40 15.25
Dynex Capital $91.90 million 4.95 $43.09 million $1.44 4.81

Dynex Capital has higher revenue and earnings than Manhattan Bridge Capital. Dynex Capital is trading at a lower price-to-earnings ratio than Manhattan Bridge Capital, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Manhattan Bridge Capital has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Dynex Capital has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Manhattan Bridge Capital and Dynex Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Manhattan Bridge Capital 0 0 2 0 3.00
Dynex Capital 0 1 1 0 2.50

Manhattan Bridge Capital presently has a consensus price target of $7.38, suggesting a potential upside of 20.90%. Dynex Capital has a consensus price target of $7.38, suggesting a potential upside of 6.42%. Given Manhattan Bridge Capital’s stronger consensus rating and higher probable upside, research analysts plainly believe Manhattan Bridge Capital is more favorable than Dynex Capital.

Profitability

This table compares Manhattan Bridge Capital and Dynex Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Manhattan Bridge Capital 59.63% 14.43% 8.33%
Dynex Capital 86.86% 11.08% 1.27%

Manhattan Bridge Capital Company Profile

Manhattan Bridge Capital, Inc. (MBC) is a real estate finance company that specializes in originating, servicing and managing a portfolio of first mortgage loans. The Company offers short-term, secured, non-banking loans to real estate investors to fund their acquisition, renovation, rehabilitation or improvement of properties located in the New York metropolitan area. Its primary business objective is to grow its loan portfolio while protecting and preserving capital in a manner that provides for risk-adjusted returns to its shareholders over the long term through dividends. It intends to achieve this objective by continuing to selectively originate, fund loans secured by first mortgages on residential real estate held for investment located in the New York metropolitan area, and to manage and service its portfolio in a manner designed to generate risk-adjusted returns across a range of market conditions and economic cycles. Its loan portfolio includes various construction loans.

Dynex Capital Company Profile

Dynex Capital, Inc. is an internally managed mortgage real estate investment trust, which invests in residential and commercial mortgage securities on a leveraged basis. The Company’s objective is to provide attractive risk-adjusted returns to its shareholders over the long term that is reflective of a leveraged fixed income portfolio with a focus on capital preservation. It seeks to provide returns to its shareholders through regular quarterly dividends and through capital appreciation. It invests in Agency and non-Agency mortgage-backed securities (MBS). MBS consists of residential MBS (RMBS), commercial MBS (CMBS) and CMBS interest-only securities. Agency MBS have a guaranty of principal payment by an agency of the United States Government or a government-sponsored entity (GSE), such as Fannie Mae and Freddie Mac.

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