Head to Head Comparison: Claros Mortgage Trust (NYSE:CMTG) & MFA Financial (NYSE:MFA)

MFA Financial (NYSE:MFA) and Claros Mortgage Trust (NYSE:CMTG) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Dividends

MFA Financial pays an annual dividend of $1.44 per share and has a dividend yield of 16.4%. Claros Mortgage Trust pays an annual dividend of $0.40 per share and has a dividend yield of 24.1%. MFA Financial pays out 144.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Claros Mortgage Trust pays out -10.4% of its earnings in the form of a dividend. MFA Financial has increased its dividend for 1 consecutive years. Claros Mortgage Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

65.3% of MFA Financial shares are held by institutional investors. Comparatively, 89.5% of Claros Mortgage Trust shares are held by institutional investors. 1.0% of MFA Financial shares are held by insiders. Comparatively, 2.6% of Claros Mortgage Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares MFA Financial and Claros Mortgage Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MFA Financial	19.38%	7.58%	1.05%
Claros Mortgage Trust	-354.13%	-19.70%	-6.52%

Analyst Recommendations

This is a breakdown of current ratings and price targets for MFA Financial and Claros Mortgage Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MFA Financial	0	3	4	0	2.57
Claros Mortgage Trust	3	1	0	0	1.25

MFA Financial currently has a consensus price target of $10.46, indicating a potential upside of 18.98%. Claros Mortgage Trust has a consensus price target of $2.22, indicating a potential upside of 33.53%. Given Claros Mortgage Trust’s higher possible upside, analysts plainly believe Claros Mortgage Trust is more favorable than MFA Financial.

Volatility and Risk

MFA Financial has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500. Comparatively, Claros Mortgage Trust has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.

Valuation and Earnings

This table compares MFA Financial and Claros Mortgage Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MFA Financial	$270.43 million	3.29	$176.78 million	$1.00	8.79
Claros Mortgage Trust	$69.81 million	3.35	-$489.07 million	($3.83)	-0.43

MFA Financial has higher revenue and earnings than Claros Mortgage Trust. Claros Mortgage Trust is trading at a lower price-to-earnings ratio than MFA Financial, indicating that it is currently the more affordable of the two stocks.

Summary

MFA Financial beats Claros Mortgage Trust on 11 of the 17 factors compared between the two stocks.

About MFA Financial

MFA Financial, Inc., together with its subsidiaries, operates as a real estate investment trust in the United States. It invests in residential mortgage securities, including non-agency mortgage-backed securities, agency MBS, and credit risk transfer securities; residential whole loans, including purchased performing loans, purchased credit deteriorated, and non-performing loans; and mortgage servicing rights related assets. The company was incorporated in 1997 and is based in New York, New York.

About Claros Mortgage Trust

Claros Mortgage Trust, Inc. operates as a real estate investment trust. It focuses on originating senior and subordinate loans on transitional commercial real estate assets in the United States. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was incorporated in 2015 and is headquartered in New York, New York.