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 weigh in compared to its peers? We will compare MFA Financial to similar companies based on the strength of its institutional ownership, risk, valuation, earnings, dividends, analyst recommendations and profitability.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MFA Financial	1	2	4	0	2.43
MFA Financial Competitors	686	1986	2136	136	2.35

MFA Financial presently has a consensus price target of $9.79, indicating a potential upside of 55.82%. As a group, “Mortgage Real Estate Investment Trusts (REITs)” companies have a potential upside of 44.30%. Given MFA Financial’s stronger consensus rating and higher possible upside, equities research analysts plainly believe MFA Financial is more favorable than its peers.

Volatility and Risk

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.

Dividends

MFA Financial pays an annual dividend of $1.44 per share and has a dividend yield of 22.9%. 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 16.4% and pay out -110.6% of their earnings in the form of a dividend. MFA Financial has increased 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.

Institutional & 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 hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares MFA Financial and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
MFA Financial	$745.06 million	$176.78 million	-11.64
MFA Financial Competitors	$762.88 million	$157.00 million	19.65

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.

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%	9.58%	1.29%
MFA Financial Competitors	-9.73%	7.41%	1.01%

Summary

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

MFA Financial Company Profile

MFA Financial, Inc., together with its subsidiaries, operates as a real estate investment trust in the United States. It invests in residential mortgage securities, including non-agency mortgage-backed securities, agency MBS, and credit risk transfer securities; residential whole loans, including purchased performing loans, purchased credit deteriorated, and non-performing loans; and mortgage servicing rights related assets. The company was incorporated in 1997 and is based in New York, New York.