Hatteras Financial Corp. (NYSE: HTS) is one of 38 public companies in the “Mortgage REITs” industry, but how does it weigh in compared to its rivals? We will compare Hatteras Financial Corp. to related companies based on the strength of its dividends, earnings, profitability, risk, institutional ownership, analyst recommendations and valuation.

Risk & Volatility

Hatteras Financial Corp. has a beta of 0.3, meaning that its stock price is 70% less volatile than the S&P 500. Comparatively, Hatteras Financial Corp.’s rivals have a beta of 0.72, meaning that their average stock price is 28% less volatile than the S&P 500.

Dividends

Hatteras Financial Corp. pays an annual dividend of $1.80 per share and has a dividend yield of 11.0%. Hatteras Financial Corp. pays out 580.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Mortgage REITs” companies pay a dividend yield of 10.2% and pay out 80.6% of their earnings in the form of a dividend.

Earnings & Valuation

This table compares Hatteras Financial Corp. and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Hatteras Financial Corp. N/A N/A 52.55
Hatteras Financial Corp. Competitors $626.30 million $243.53 million 1.65

Hatteras Financial Corp.’s rivals have higher revenue and earnings than Hatteras Financial Corp.. Hatteras Financial Corp. is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a summary of recent ratings for Hatteras Financial Corp. and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hatteras Financial Corp. 0 0 0 0 N/A
Hatteras Financial Corp. Competitors 199 1029 911 41 2.36

As a group, “Mortgage REITs” companies have a potential upside of 4.10%. Given Hatteras Financial Corp.’s rivals higher possible upside, analysts plainly believe Hatteras Financial Corp. has less favorable growth aspects than its rivals.

Insider & Institutional Ownership

58.1% of shares of all “Mortgage REITs” companies are held by institutional investors. 3.3% of shares of all “Mortgage REITs” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Hatteras Financial Corp. and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hatteras Financial Corp. N/A -16.93% -1.89%
Hatteras Financial Corp. Competitors 49.20% 10.70% 2.78%

Summary

Hatteras Financial Corp. rivals beat Hatteras Financial Corp. on 9 of the 10 factors compared.

About Hatteras Financial Corp.

Hatteras Financial Corp. is an externally managed mortgage real estate investment trust (REIT) that invests in single-family residential mortgage real estate assets, such as mortgage-backed security (MBS), mortgage servicing right (MSR), residential mortgage loans and other financial assets. MBS are pass-through securities consisting of a pool of mortgage loans. Its primary business is owning and managing agency securities, with a primary focus on adjustable-rate mortgage securities. Its primary investment assets include Agency MBS; other agency issued securities, such as credit-risk transfer bonds; MSR; non-agency securities; residential mortgage loans, and other real estate related assets as permitted by its investment guidelines and REIT requirements. Its business operations consist of the Hatteras Financial Corp., Onslow Bay Financial LLC, First Winston Securities, Inc. and Wind River TRS LLC. It is externally managed and advised by its manager, Atlantic Capital Advisors LLC.

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