Contrasting Fannie Mae (OTCMKTS:FNMA) and Walker & Dunlop (NYSE:WD)

Walker & Dunlop (NYSE:WD) and Fannie Mae (OTCMKTS:FNMA) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Analyst Recommendations

This is a summary of current recommendations and price targets for Walker & Dunlop and Fannie Mae, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Walker & Dunlop	0	1	1	1	3.00
Fannie Mae	1	0	0	0	1.00

Walker & Dunlop presently has a consensus price target of $102.50, indicating a potential upside of 34.20%. Fannie Mae has a consensus price target of $4.00, indicating a potential downside of 49.34%. Given Walker & Dunlop’s stronger consensus rating and higher probable upside, analysts clearly believe Walker & Dunlop is more favorable than Fannie Mae.

Volatility and Risk

Walker & Dunlop has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500. Comparatively, Fannie Mae has a beta of 1.97, suggesting that its share price is 97% more volatile than the S&P 500.

Institutional & Insider Ownership

81.0% of Walker & Dunlop shares are owned by institutional investors. Comparatively, 0.0% of Fannie Mae shares are owned by institutional investors. 3.7% of Walker & Dunlop shares are owned by insiders. Comparatively, 1.0% of Fannie Mae shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Walker & Dunlop and Fannie Mae’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Walker & Dunlop	8.68%	8.99%	3.56%
Fannie Mae	10.56%	-34.38%	0.38%

Earnings & Valuation

This table compares Walker & Dunlop and Fannie Mae”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Walker & Dunlop	$1.13 billion	2.29	$108.17 million	$2.92	26.16
Fannie Mae	$152.67 billion	0.06	$16.98 billion	N/A	N/A

Fannie Mae has higher revenue and earnings than Walker & Dunlop.

Summary

Walker & Dunlop beats Fannie Mae on 9 of the 13 factors compared between the two stocks.

About Walker & Dunlop

Walker & Dunlop, Inc. is a holding company, which engages in the provision of commercial real estate and finance services. It operates through the following segments: Capital Markets, Servicing and Asset Management, and Corporate. The Capital Markets segment offers a comprehensive range of commercial real estate finance products to customers. The Servicing and Asset Management segment includes servicing and asset-managing and managing third-party capital investments. The Corporate segment consists primarily of the company’s treasury operations and other corporate-level activities. The company was founded by Oliver Walker and Laird Dunlop in 1937 and is headquartered in Bethesda, MD.

About Fannie Mae

Federal National Mortgage Association provides financing solutions for mortgages in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment securitizes and purchases single-family fixed-rate or adjustable-rate, first-lien mortgage loans, or mortgage-related securities backed by these loans; and loans that are insured by Federal Housing Administration, loans guaranteed by the Department of Veterans Affairs and Rural Development Housing and Community Facilities Program of the U.S. Department of Agriculture, manufactured housing mortgage loans, and other mortgage-related securities. The Multifamily segment securitizes multifamily mortgage loans into Fannie Mae mortgage backed securities (MBS); purchases multifamily mortgage loans; and provides credit enhancement for bonds issued by state and local housing finance authorities to finance multifamily housing. This segment also issues structured MBS backed by Fannie Mae multifamily MBS; buys and sells multifamily agency mortgage-backed securities; and invests in low-income housing tax credit multifamily projects. Federal National Mortgage Association was founded in 1938 and is based in Washington, the District of Columbia.