New York Mortgage Trust (NASDAQ: NYMT) and New Residential Investment (NYSE:NRZ) are both financials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, dividends, earnings and profitability.
New York Mortgage Trust pays an annual dividend of $0.80 per share and has a dividend yield of 14.3%. New Residential Investment pays an annual dividend of $2.00 per share and has a dividend yield of 11.9%. New York Mortgage Trust pays out 160.0% 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 Residential Investment pays out 64.1% of its earnings in the form of a dividend. New Residential Investment has increased its dividend for 4 consecutive years.
This is a breakdown of recent ratings for New York Mortgage Trust and New Residential Investment, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|New York Mortgage Trust||0||4||1||0||2.20|
|New Residential Investment||0||0||6||0||3.00|
New York Mortgage Trust currently has a consensus price target of $6.19, suggesting a potential upside of 10.49%. New Residential Investment has a consensus price target of $18.88, suggesting a potential upside of 12.15%. Given New Residential Investment’s stronger consensus rating and higher possible upside, analysts plainly believe New Residential Investment is more favorable than New York Mortgage Trust.
Valuation and Earnings
This table compares New York Mortgage Trust and New Residential Investment’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|New York Mortgage Trust||$319.31 million||1.96||$67.55 million||$0.50||11.20|
|New Residential Investment||$1.08 billion||5.25||$504.45 million||$3.12||5.39|
New Residential Investment has higher revenue and earnings than New York Mortgage Trust. New Residential Investment 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.
Insider & Institutional Ownership
38.0% of New York Mortgage Trust shares are held by institutional investors. Comparatively, 45.3% of New Residential Investment shares are held by institutional investors. 1.3% of New York Mortgage Trust shares are held by insiders. Comparatively, 0.5% of New Residential Investment shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Volatility & Risk
New York Mortgage Trust has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, New Residential Investment has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.
This table compares New York Mortgage Trust and New Residential Investment’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|New York Mortgage Trust||20.23%||10.78%||0.74%|
|New Residential Investment||60.06%||19.38%||3.99%|
New Residential Investment beats New York Mortgage Trust on 13 of the 17 factors compared between the two stocks.
New York Mortgage Trust Company Profile
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.
New Residential Investment Company Profile
New Residential Investment Corp. is a real estate investment trust (REIT). The Company focuses on investing in, and managing, investments related to residential real estate. The Company’s segments include investments in excess mortgage servicing rights (Excess MSRs); investments in mortgage servicing rights (MSRs); investments in servicer advances; investments in real estate securities; investments in residential mortgage loans; investments in consumer loans, and corporate. Its portfolio includes mortgage servicing related assets, residential mortgage backed securities (RMBS), residential mortgage loans and other investments. The Company’s servicing related assets include its investments in Excess MSRs, MSRs and servicer advances. The Company invests in agency RMBS and non-agency RMBS. The Company’s other investments consist of consumer loans.
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