Fannie Mae (OTCMKTS:FNMA) & CF Bankshares (NASDAQ:CFBK) Critical Review

Fannie Mae (OTCMKTS:FNMA) and CF Bankshares (NASDAQ:CFBK) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Earnings & Valuation

This table compares Fannie Mae and CF Bankshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fannie Mae	$159.17 billion	0.04	$14.36 billion	$0.04	121.25
CF Bankshares	$125.92 million	1.75	$17.54 million	$2.91	11.82

Fannie Mae has higher revenue and earnings than CF Bankshares. CF Bankshares is trading at a lower price-to-earnings ratio than Fannie Mae, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Fannie Mae and CF Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fannie Mae	4.59%	-76.66%	0.51%
CF Bankshares	15.10%	10.10%	0.88%

Volatility and Risk

Fannie Mae has a beta of 1.7, indicating that its stock price is 70% more volatile than the S&P 500. Comparatively, CF Bankshares has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500.

Institutional and Insider Ownership

0.0% of Fannie Mae shares are owned by institutional investors. Comparatively, 41.1% of CF Bankshares shares are owned by institutional investors. 1.0% of Fannie Mae shares are owned by insiders. Comparatively, 17.7% of CF Bankshares shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Fannie Mae and CF Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fannie Mae	1	4	0	1	2.17
CF Bankshares	0	1	2	0	2.67

Fannie Mae currently has a consensus price target of $10.70, suggesting a potential upside of 120.62%. CF Bankshares has a consensus price target of $40.00, suggesting a potential upside of 16.28%. Given Fannie Mae’s higher probable upside, research analysts clearly believe Fannie Mae is more favorable than CF Bankshares.

Summary

CF Bankshares beats Fannie Mae on 9 of the 15 factors compared between the two stocks.

About Fannie Mae

Federal National Mortgage Association provides financing solutions for mortgages in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment securitizes and purchases single-family fixed-rate or adjustable-rate, first-lien mortgage loans, or mortgage-related securities backed by these loans; and loans that are insured by Federal Housing Administration, loans guaranteed by the Department of Veterans Affairs and Rural Development Housing and Community Facilities Program of the U.S. Department of Agriculture, manufactured housing mortgage loans, and other mortgage-related securities. The Multifamily segment securitizes multifamily mortgage loans into Fannie Mae mortgage backed securities (MBS); purchases multifamily mortgage loans; and provides credit enhancement for bonds issued by state and local housing finance authorities to finance multifamily housing. This segment also issues structured MBS backed by Fannie Mae multifamily MBS; buys and sells multifamily agency mortgage-backed securities; and invests in low-income housing tax credit multifamily projects. Federal National Mortgage Association was founded in 1938 and is based in Washington, the District of Columbia.

About CF Bankshares

CF Bankshares Inc. operates as the bank holding company for CFBank, National Association that provides various banking products and services in the United States. The company accepts savings, retail and business checking accounts, and money market accounts, as well as certificates of deposit. It offers single-family mortgage loans; commercial real estate and multi-family residential mortgage loans; commercial loans and equipment leases; residential real estate loans and treasury management depository services; retail banking services and products. In addition, the company offers consumer loans, such as home equity lines of credit, home improvement loans, and loans secured by deposits and purchased loans, as well as other loans. Further, it provides online internet banking, mobile banking, and remote deposits. The company was formerly known as Central Federal Corporation and changed its name to CF Bankshares Inc. in July 2020. CF Bankshares Inc. was founded in 1892 and is based in Columbus, Ohio.