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

Earnings and Valuation

This table compares MFA Financial and New York Mortgage Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MFA Financial $376.15 million 9.24 $309.13 million $0.78 11.24
New York Mortgage Trust $107.14 million 6.62 $57.06 million $0.51 12.43

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

Dividends

MFA Financial pays an annual dividend of $0.80 per share and has a dividend yield of 9.1%. New York Mortgage Trust pays an annual dividend of $0.80 per share and has a dividend yield of 12.6%. 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. New York Mortgage Trust pays out 156.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

MFA Financial has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, New York Mortgage Trust has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
MFA Financial 61.94% 10.12% 2.58%
New York Mortgage Trust 19.62% 10.05% 0.71%

Institutional and Insider Ownership

80.1% of MFA Financial shares are held by institutional investors. Comparatively, 36.1% of New York Mortgage Trust shares are held by institutional investors. 0.9% of MFA Financial shares are held by insiders. Comparatively, 1.3% of New York Mortgage Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations and price targets for MFA Financial and New York Mortgage Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MFA Financial 0 2 2 0 2.50
New York Mortgage Trust 0 3 1 0 2.25

MFA Financial presently has a consensus price target of $8.50, indicating a potential downside of 3.08%. New York Mortgage Trust has a consensus price target of $6.42, indicating a potential upside of 1.21%. Given New York Mortgage Trust’s higher probable upside, analysts clearly believe New York Mortgage Trust is more favorable than MFA Financial.

Summary

MFA Financial beats New York Mortgage Trust on 11 of the 16 factors compared between the two stocks.

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).

About New York Mortgage Trust

New York Mortgage Trust, Inc. is a real estate investment trust (REIT). The Company is engaged in the business of acquiring, investing in, financing and managing primarily mortgage-related assets and financial assets. The Company’s investment portfolio includes residential mortgage loans, including second mortgages and loans sourced from distressed markets, non-agency residential mortgage-backed securities (RMBS), multi-family commercial mortgage-backed securities, preferred equity and joint venture equity investments in, and mezzanine loans to, owners of multi-family properties, equity and debt securities issued by entities that invest in residential and commercial real estate and agency RMBS. It may acquire and manage various other types of mortgage-related and financial assets, including, without limitation, collateralized mortgage obligations and securities issued by newly originated residential securitizations, including credit sensitive securities from these securitizations.

Receive News & Ratings for MFA Financial Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for MFA Financial Inc. and related companies with MarketBeat.com's FREE daily email newsletter.