Analyzing MFA Financial (MFA) & Its Peers

MFA Financial (NYSE:MFA) is one of 52 publicly-traded companies in the “Mortgage Real Estate Investment Trusts (REITs)” industry, but how does it contrast to its peers? We will compare MFA Financial to similar companies based on the strength of its valuation, profitability, institutional ownership, dividends, analyst recommendations, earnings and risk.

Risk & Volatility

MFA Financial has a beta of 1.51, indicating that its stock price is 51% more volatile than the S&P 500. Comparatively, MFA Financial’s peers have a beta of 1.21, indicating that their average stock price is 21% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for MFA Financial and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MFA Financial	1	2	4	0	2.43
MFA Financial Competitors	691	1992	2139	136	2.35

MFA Financial presently has a consensus target price of $9.29, suggesting a potential upside of 67.27%. As a group, “Mortgage Real Estate Investment Trusts (REITs)” companies have a potential upside of 54.12%. Given MFA Financial’s stronger consensus rating and higher probable upside, research analysts clearly believe MFA Financial is more favorable than its peers.

Profitability

This table compares MFA Financial and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MFA Financial	-1.48%	9.82%	1.29%
MFA Financial Competitors	-13.29%	7.67%	1.05%

Dividends

MFA Financial pays an annual dividend of $1.44 per share and has a dividend yield of 25.9%. MFA Financial pays out -266.7% of its earnings in the form of a dividend. As a group, “Mortgage Real Estate Investment Trusts (REITs)” companies pay a dividend yield of 17.4% and pay out -110.1% of their earnings in the form of a dividend. MFA Financial has raised its dividend for 1 consecutive years. MFA Financial is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares MFA Financial and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
MFA Financial	$745.06 million	$176.78 million	-10.29
MFA Financial Competitors	$762.88 million	$157.00 million	18.22

MFA Financial’s peers have higher revenue, but lower earnings than MFA Financial. MFA Financial is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Institutional and Insider Ownership

65.3% of MFA Financial shares are owned by institutional investors. Comparatively, 52.3% of shares of all “Mortgage Real Estate Investment Trusts (REITs)” companies are owned by institutional investors. 1.0% of MFA Financial shares are owned by company insiders. Comparatively, 4.8% of shares of all “Mortgage Real Estate Investment Trusts (REITs)” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

MFA Financial beats its peers on 11 of the 15 factors compared.

About MFA Financial

MFA Financial, Inc. is a real estate investment trust focused on residential mortgage assets. The company invests in mortgage-backed securities and residential mortgage loans, including loans that it acquires or originates. Its portfolio includes agency and non-agency mortgage-backed securities, as well as whole loans secured by residential properties. Through its subsidiary Lima One Capital, MFA also provides financing to real estate investors, including loans for property renovation and rental housing.