Contrasting Angel Oak Mortgage REIT (NYSE:AOMR) & MFA Financial (NYSE:MFA)

MFA Financial (NYSE:MFA) and Angel Oak Mortgage REIT (NYSE:AOMR) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, risk and analyst recommendations.

Profitability

This table compares MFA Financial and Angel Oak Mortgage REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MFA Financial	17.62%	8.61%	1.39%
Angel Oak Mortgage REIT	12.93%	6.42%	0.63%

Dividends

MFA Financial pays an annual dividend of $1.44 per share and has a dividend yield of 15.5%. Angel Oak Mortgage REIT pays an annual dividend of $1.28 per share and has a dividend yield of 14.6%. MFA Financial pays out 169.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Angel Oak Mortgage REIT pays out 180.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MFA Financial has raised its dividend for 1 consecutive years. MFA Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

MFA Financial has a beta of 1.73, indicating that its stock price is 73% more volatile than the S&P 500. Comparatively, Angel Oak Mortgage REIT has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500.

Insider & Institutional Ownership

65.3% of MFA Financial shares are owned by institutional investors. Comparatively, 80.2% of Angel Oak Mortgage REIT shares are owned by institutional investors. 0.8% of MFA Financial shares are owned by company insiders. Comparatively, 2.9% of Angel Oak Mortgage REIT shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares MFA Financial and Angel Oak Mortgage REIT”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MFA Financial	$249.92 million	3.81	$119.25 million	$0.85	10.92
Angel Oak Mortgage REIT	$34.71 million	6.02	$28.75 million	$0.71	12.38

MFA Financial has higher revenue and earnings than Angel Oak Mortgage REIT. MFA Financial is trading at a lower price-to-earnings ratio than Angel Oak Mortgage REIT, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for MFA Financial and Angel Oak Mortgage REIT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MFA Financial	1	3	3	0	2.29
Angel Oak Mortgage REIT	1	2	4	0	2.43

MFA Financial currently has a consensus price target of $11.10, indicating a potential upside of 19.55%. Angel Oak Mortgage REIT has a consensus price target of $11.60, indicating a potential upside of 31.97%. Given Angel Oak Mortgage REIT’s stronger consensus rating and higher probable upside, analysts clearly believe Angel Oak Mortgage REIT is more favorable than MFA Financial.

Summary

MFA Financial beats Angel Oak Mortgage REIT on 10 of the 17 factors compared between the two stocks.

About MFA Financial

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.

About Angel Oak Mortgage REIT

Angel Oak Mortgage REIT, Inc., a real estate finance company, focuses on acquiring and investing in first lien non- qualified mortgage loans and other mortgage-related assets in the United States mortgage market. It offers investment securities; residential mortgage loans; and commercial mortgage loans. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was incorporated in 2018 and is headquartered in Atlanta, Georgia.