Head-To-Head Survey: New Residential Investment (NRZ) versus New York Mortgage Trust (NYMT)

New Residential Investment (NYSE: NRZ) and New York Mortgage Trust (NASDAQ:NYMT) are both financials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Dividends

New Residential Investment pays an annual dividend of $2.00 per share and has a dividend yield of 12.3%. New York Mortgage Trust pays an annual dividend of $0.80 per share and has a dividend yield of 14.7%. New Residential Investment pays out 64.7% of its earnings in the form of a dividend. New York Mortgage Trust pays out 160.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. New York Mortgage Trust has increased its dividend for 4 consecutive years. New York Mortgage Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

45.1% of New Residential Investment shares are held by institutional investors. Comparatively, 37.9% of New York Mortgage Trust shares are held by institutional investors. 4.0% of New Residential Investment shares are held by insiders. Comparatively, 1.3% of New York Mortgage Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares New Residential Investment and New York Mortgage Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New Residential Investment $1.08 billion 5.09 $504.45 million $3.09 5.28
New York Mortgage Trust $319.31 million 1.91 $67.55 million $0.50 10.90

New Residential Investment has higher revenue and earnings than New York Mortgage Trust. New Residential Investment is trading at a lower price-to-earnings ratio than New York Mortgage Trust, 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 and New York Mortgage Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Residential Investment 0 0 6 0 3.00
New York Mortgage Trust 0 4 1 0 2.20

New Residential Investment currently has a consensus target price of $18.92, suggesting a potential upside of 16.05%. New York Mortgage Trust has a consensus target price of $6.19, suggesting a potential upside of 13.53%. Given New Residential Investment’s stronger consensus rating and higher probable upside, equities analysts clearly believe New Residential Investment is more favorable than New York Mortgage Trust.

Profitability

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

Net Margins Return on Equity Return on Assets
New Residential Investment 60.06% 19.38% 3.99%
New York Mortgage Trust 20.23% 10.78% 0.74%

Risk & Volatility

New Residential Investment has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, New York Mortgage Trust has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500.

Summary

New Residential Investment beats New York Mortgage Trust on 13 of the 17 factors compared between the two stocks.

About New Residential Investment

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.

About New York Mortgage Trust

New York Mortgage Trust, Inc. is a real estate investment trust (REIT). The Company is engaged in the business of acquiring, investing in, financing and managing primarily mortgage-related assets and financial assets. The Company’s investment portfolio includes residential mortgage loans, including second mortgages and loans sourced from distressed markets, non-agency residential mortgage-backed securities (RMBS), multi-family commercial mortgage-backed securities, preferred equity and joint venture equity investments in, and mezzanine loans to, owners of multi-family properties, equity and debt securities issued by entities that invest in residential and commercial real estate and agency RMBS. It may acquire and manage various other types of mortgage-related and financial assets, including, without limitation, collateralized mortgage obligations and securities issued by newly originated residential securitizations, including credit sensitive securities from these securitizations.

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