Critical Analysis: CYS Investments (CYS) & Annaly Capital Management (NLY)
CYS Investments (NYSE: CYS) and Annaly Capital Management (NYSE:NLY) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, valuation, risk, earnings, institutional ownership and dividends.
Risk & Volatility
CYS Investments has a beta of 0.42, meaning that its share price is 58% less volatile than the S&P 500. Comparatively, Annaly Capital Management has a beta of 0.1, meaning that its share price is 90% less volatile than the S&P 500.
This table compares CYS Investments and Annaly Capital Management’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|CYS Investments||$318.87 million||3.32||$181.26 million||$1.05||6.50|
|Annaly Capital Management||$1.48 billion||8.29||$1.57 billion||$1.33||7.98|
Annaly Capital Management has higher revenue and earnings than CYS Investments. CYS Investments is trading at a lower price-to-earnings ratio than Annaly Capital Management, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
62.8% of CYS Investments shares are owned by institutional investors. Comparatively, 60.1% of Annaly Capital Management shares are owned by institutional investors. 1.0% of CYS Investments shares are owned by insiders. Comparatively, 0.4% of Annaly Capital Management shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
CYS Investments pays an annual dividend of $1.00 per share and has a dividend yield of 14.7%. Annaly Capital Management pays an annual dividend of $1.20 per share and has a dividend yield of 11.3%. CYS Investments pays out 95.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Annaly Capital Management pays out 90.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This is a breakdown of recent ratings and price targets for CYS Investments and Annaly Capital Management, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Annaly Capital Management||0||3||1||0||2.25|
CYS Investments presently has a consensus price target of $8.50, indicating a potential upside of 24.63%. Annaly Capital Management has a consensus price target of $11.63, indicating a potential upside of 9.46%. Given CYS Investments’ higher probable upside, equities analysts plainly believe CYS Investments is more favorable than Annaly Capital Management.
This table compares CYS Investments and Annaly Capital Management’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Annaly Capital Management||72.18%||11.66%||1.53%|
Annaly Capital Management beats CYS Investments on 10 of the 16 factors compared between the two stocks.
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.
About Annaly Capital Management
Annaly Capital Management, Inc. is a mortgage real estate investment trust (REIT). The Company owns a portfolio of real estate related investments. Its investment groups primarily consist of Agency, which invests primarily in various types of Agency mortgage-backed securities and related derivatives to hedge these investments; Residential credit, which invests primarily in non-Agency mortgage-backed assets within securitized products and residential mortgage loan markets; Commercial real estate, which originates and invests in commercial mortgage loans, securities, and other commercial real estate investments, and Middle market, which provides customized debt financing to middle-market businesses. Its business operations consist of Annaly Commercial Real Estate Group, Inc., which is its subsidiary that specializes in originating or acquiring, financing and managing commercial loans and other commercial real estate debt; Annaly Middle Market Lending LLC, and RCap Securities, Inc.
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