AGNC Investment (NASDAQ:AGNC) versus Orchid Island Capital (NYSE:ORC) Head-To-Head Survey

Orchid Island Capital (NYSE:ORC) and AGNC Investment (NASDAQ:AGNC) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, profitability, earnings, institutional ownership and dividends.

Risk and Volatility

Orchid Island Capital has a beta of 1.68, indicating that its share price is 68% more volatile than the S&P 500. Comparatively, AGNC Investment has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500.

Institutional & Insider Ownership

32.7% of Orchid Island Capital shares are owned by institutional investors. Comparatively, 38.3% of AGNC Investment shares are owned by institutional investors. 0.4% of Orchid Island Capital shares are owned by insiders. Comparatively, 0.4% of AGNC Investment shares are owned by 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.

Dividends

Orchid Island Capital pays an annual dividend of $1.44 per share and has a dividend yield of 19.1%. AGNC Investment pays an annual dividend of $1.44 per share and has a dividend yield of 12.7%. Orchid Island Capital pays out 138.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AGNC Investment pays out 102.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Orchid Island Capital has increased its dividend for 1 consecutive years. Orchid Island Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Orchid Island Capital and AGNC Investment, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orchid Island Capital	1	2	0	0	1.67
AGNC Investment	0	7	4	0	2.36

Orchid Island Capital currently has a consensus price target of $7.50, suggesting a potential downside of 0.46%. AGNC Investment has a consensus price target of $11.03, suggesting a potential downside of 2.89%. Given Orchid Island Capital’s higher probable upside, equities research analysts plainly believe Orchid Island Capital is more favorable than AGNC Investment.

Profitability

This table compares Orchid Island Capital and AGNC Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orchid Island Capital	N/A	9.23%	1.10%
AGNC Investment	47.40%	19.13%	1.66%

Earnings & Valuation

This table compares Orchid Island Capital and AGNC Investment”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orchid Island Capital	$241.58 million	5.72	$159.03 million	$1.04	7.25
AGNC Investment	$3.52 billion	3.46	$1.67 billion	$1.40	8.11

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

Summary

AGNC Investment beats Orchid Island Capital on 12 of the 17 factors compared between the two stocks.

About Orchid Island Capital

Orchid Island Capital, Inc., a specialty finance company, invests in residential mortgage-backed securities (RMBS) in the United States. The company’s RMBS is backed by single-family residential mortgage loans, referred as Agency RMBS. Its portfolio includes traditional pass-through Agency RMBS, such as mortgage pass through certificates and collateralized mortgage obligations; and structured Agency RMBS comprising interest only securities, inverse interest only securities, and principal only securities. The company has elected to be taxed as a real estate investment trust (REIT) for the United States federal income tax purposes. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to stockholders, if it annually distributes dividends equal to at least 90% of its REIT taxable income to its stockholders. Orchid Island Capital, Inc. was incorporated in 2010 and is headquartered in Vero Beach, Florida.

About AGNC Investment

AGNC Investment Corp., formerly American Capital Agency Corp., is a real estate investment trust. The Company invests in agency residential mortgage-backed securities on a leveraged basis. Its investments consist of residential mortgage pass-through securities and collateralized mortgage obligations (CMOs) for which the principal and interest payments are guaranteed by a government-sponsored enterprise, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), or by the United States Government agency, such as the Government National Mortgage Association (Ginnie Mae) (collectively, GSEs). Its agency securities include agency residential mortgage-backed securities (Agency RMBS) and to-be-announced forward contracts (TBAs). Its Non-Agency Securities include credit risk transfer securities (CRT), non-agency residential mortgage-backed securities (Non-Agency RMBS) and commercial mortgage-backed securities (CMBS).