STARWOOD PROPERTY TRUST, INC. (NYSE: STWD) and MFA Financial (NYSE:MFA) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, dividends, analyst recommendations and risk.
This is a breakdown of current ratings and target prices for STARWOOD PROPERTY TRUST, INC. and MFA Financial, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|STARWOOD PROPERTY TRUST, INC.||0||1||2||0||2.67|
STARWOOD PROPERTY TRUST, INC. presently has a consensus target price of $24.50, indicating a potential upside of 11.36%. MFA Financial has a consensus target price of $8.50, indicating a potential downside of 3.19%. Given STARWOOD PROPERTY TRUST, INC.’s stronger consensus rating and higher possible upside, equities research analysts plainly believe STARWOOD PROPERTY TRUST, INC. is more favorable than MFA Financial.
This table compares STARWOOD PROPERTY TRUST, INC. and MFA Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|STARWOOD PROPERTY TRUST, INC.||55.89%||11.39%||0.69%|
Earnings and Valuation
This table compares STARWOOD PROPERTY TRUST, INC. and MFA Financial’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|STARWOOD PROPERTY TRUST, INC.||$546.16 million||10.45||$456.67 million||$1.76||12.50|
|MFA Financial||$376.15 million||9.25||$309.13 million||$0.78||11.26|
STARWOOD PROPERTY TRUST, INC. has higher revenue and earnings than MFA Financial. MFA Financial is trading at a lower price-to-earnings ratio than STARWOOD PROPERTY TRUST, INC., indicating that it is currently the more affordable of the two stocks.
STARWOOD PROPERTY TRUST, INC. pays an annual dividend of $1.92 per share and has a dividend yield of 8.7%. MFA Financial pays an annual dividend of $0.80 per share and has a dividend yield of 9.1%. STARWOOD PROPERTY TRUST, INC. pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MFA Financial pays out 102.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MFA Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk & Volatility
STARWOOD PROPERTY TRUST, INC. has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, MFA Financial has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.
Insider and Institutional Ownership
68.6% of STARWOOD PROPERTY TRUST, INC. shares are owned by institutional investors. Comparatively, 80.1% of MFA Financial shares are owned by institutional investors. 2.4% of STARWOOD PROPERTY TRUST, INC. shares are owned by company insiders. Comparatively, 0.9% of MFA Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
STARWOOD PROPERTY TRUST, INC. beats MFA Financial on 8 of the 15 factors compared between the two stocks.
About STARWOOD PROPERTY TRUST, INC.
Starwood Property Trust, Inc. is a real estate investment trust. The Company operates through three business segments: Real estate lending (the Lending Segment), which engages primarily in originating, acquiring, financing and managing commercial first mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), residential mortgage-backed securities, and other real estate and real estate-related debt investments; Real estate investing and servicing (the Investing and Servicing Segment), which includes a servicing business in the United States that manages and works out problem assets; an investment business that selectively acquires and manages unrated, investment grade and non-investment grade rated CMBS, and a mortgage loan business, and Real estate property (the Property Segment), which engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties.
About MFA Financial
MFA Financial, Inc. is engaged in the real estate finance business. The Company’s subsidiaries invest in residential mortgage assets, including Non-Agency mortgage-backed securities (MBS), Agency MBS, residential whole loans and credit risk transfer (CRT) securities. The Company’s Non-Agency MBS portfolio primarily consists of Legacy Non-Agency MBS and 3 Year Step-up securities. In addition to Non-Agency MBS investments, the Company invests in re-performing and non-performing residential whole loans through its interests in certain consolidated trusts. The mortgages collateralizing its Agency MBS portfolio are predominantly Hybrids, 15-year fixed-rate mortgages and adjustable-rate mortgages (ARMs).
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