Mack Cali Realty (NYSE: ORC) and Orchid Island Capital (NYSE:ORC) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Dividends

Mack Cali Realty pays an annual dividend of $0.80 per share and has a dividend yield of 3.8%. Orchid Island Capital pays an annual dividend of $0.96 per share and has a dividend yield of 12.8%. Mack Cali Realty pays out 35.9% of its earnings in the form of a dividend. Orchid Island Capital pays out 114.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mack Cali Realty has raised its dividend for 2 consecutive years.

Valuation and Earnings

This table compares Mack Cali Realty and Orchid Island Capital’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mack Cali Realty $616.20 million 3.09 $23.18 million $2.23 9.45
Orchid Island Capital $145.96 million 2.67 $2.00 million $0.84 8.93

Mack Cali Realty has higher revenue and earnings than Orchid Island Capital. Orchid Island Capital is trading at a lower price-to-earnings ratio than Mack Cali Realty, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Mack Cali Realty and Orchid Island Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mack Cali Realty 13.89% 4.70% 1.61%
Orchid Island Capital N/A 20.14% 2.13%

Institutional & Insider Ownership

99.0% of Mack Cali Realty shares are owned by institutional investors. Comparatively, 33.1% of Orchid Island Capital shares are owned by institutional investors. 6.8% of Mack Cali Realty shares are owned by company insiders. Comparatively, 0.3% of Orchid Island Capital shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Mack Cali Realty and Orchid Island Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mack Cali Realty 0 4 1 0 2.20
Orchid Island Capital 0 0 0 0 N/A

Mack Cali Realty presently has a consensus target price of $22.80, suggesting a potential upside of 8.16%. Given Mack Cali Realty’s higher probable upside, equities analysts clearly believe Mack Cali Realty is more favorable than Orchid Island Capital.

Volatility and Risk

Mack Cali Realty has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, Orchid Island Capital has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500.

Summary

Mack Cali Realty beats Orchid Island Capital on 13 of the 16 factors compared between the two stocks.

Mack Cali Realty Company Profile

Mack-Cali Realty Corporation is fully-integrated and self-managed company, Mack-Cali has provided world-class management, leasing, and development services throughout New Jersey and the surrounding region for two decades. By regularly investing in its properties and innovative lifestyle amenity packages, Mack-Cali creates environments that empower tenants and residents to reimagine the way they work and live.

Orchid Island Capital Company Profile

Orchid Island Capital, Inc., a specialty finance company, invests in residential mortgage-backed securities (RMBS) in the United States. The company's RMBS are backed primarily by single-family residential mortgage loans, referred as Agency RMBS. Its portfolio includes traditional pass-through Agency RMBS; and structured Agency RMBS, including collateralized mortgage obligations, interest only securities, inverse interest only securities, and principal only securities. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2010 and is headquartered in Vero Beach, Florida.

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