Head to Head Analysis: Dynex Capital (DX) vs. CYS Investments (CYS)
Dynex Capital (NYSE: DX) and CYS Investments (NYSE:CYS) are both small-cap financials companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, earnings, analyst recommendations, dividends and profitability.
This is a breakdown of recent ratings and target prices for Dynex Capital and CYS Investments, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
This table compares Dynex Capital and CYS Investments’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation and Earnings
This table compares Dynex Capital and CYS Investments’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Dynex Capital||$91.90 million||4.39||$43.09 million||$1.44||4.26|
|CYS Investments||$294.54 million||3.36||$16.39 million||($0.20)||-31.95|
Dynex Capital has higher earnings, but lower revenue than CYS Investments. CYS Investments is trading at a lower price-to-earnings ratio than Dynex Capital, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Dynex Capital has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500. Comparatively, CYS Investments has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500.
Dynex Capital pays an annual dividend of $0.72 per share and has a dividend yield of 11.7%. CYS Investments pays an annual dividend of $1.00 per share and has a dividend yield of 15.6%. Dynex Capital pays out 50.0% of its earnings in the form of a dividend. CYS Investments pays out -500.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. CYS Investments is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
36.6% of Dynex Capital shares are held by institutional investors. Comparatively, 62.2% of CYS Investments shares are held by institutional investors. 7.1% of Dynex Capital shares are held by insiders. Comparatively, 1.0% of CYS Investments shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Dynex Capital beats CYS Investments on 9 of the 16 factors compared between the two stocks.
About Dynex Capital
Dynex Capital, Inc. is an internally managed mortgage real estate investment trust, which invests in residential and commercial mortgage securities on a leveraged basis. The Company’s objective is to provide attractive risk-adjusted returns to its shareholders over the long term that is reflective of a leveraged fixed income portfolio with a focus on capital preservation. It seeks to provide returns to its shareholders through regular quarterly dividends and through capital appreciation. It invests in Agency and non-Agency mortgage-backed securities (MBS). MBS consists of residential MBS (RMBS), commercial MBS (CMBS) and CMBS interest-only securities. Agency MBS have a guaranty of principal payment by an agency of the United States Government or a government-sponsored entity (GSE), such as Fannie Mae and Freddie Mac.
About CYS Investments
CYS Investments, Inc. is a specialty finance company. The Company’s objective is to provide consistent returns to its investors through a combination of dividends and capital appreciation. It invests in agency residential mortgage-backed security (RMBS) collateralized by fixed rate single-family residential mortgage loans; adjustable-rate mortgages (ARMs), which have coupon rates that reset monthly, or hybrid ARMs, which have a coupon rate that is fixed for an initial period. In addition, it has investments in collateralized mortgage obligations issued by a government agency or government-sponsored entity (GSE) that are collateralized by Agency RMBS. Its investments consist of residential mortgage pass-through securities for which the principal and interest payments are guaranteed by a GSE, such as Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, or by the United States Government agency, such as Government National Mortgage Association.
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