Annaly Capital Management (NYSE:NLY – Get Free Report) and Adamas Trust (NASDAQ:ADAM – Get Free Report) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, dividends, risk and earnings.
Dividends
Annaly Capital Management pays an annual dividend of $3.00 per share and has a dividend yield of 14.6%. Adamas Trust pays an annual dividend of $1.20 per share and has a dividend yield of 14.7%. Annaly Capital Management pays out 75.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Adamas Trust pays out 71.4% of its earnings in the form of a dividend. Annaly Capital Management has raised its dividend for 2 consecutive years. Adamas Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Annaly Capital Management and Adamas Trust”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Annaly Capital Management | $5.96 billion | 2.60 | $2.03 billion | $3.99 | 5.15 |
| Adamas Trust | $601.95 million | 1.22 | $149.05 million | $1.68 | 4.85 |
Annaly Capital Management has higher revenue and earnings than Adamas Trust. Adamas Trust is trading at a lower price-to-earnings ratio than Annaly Capital Management, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Annaly Capital Management and Adamas Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Annaly Capital Management | 43.66% | 16.00% | 1.69% |
| Adamas Trust | 29.82% | 14.72% | 1.04% |
Volatility and Risk
Annaly Capital Management has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500. Comparatively, Adamas Trust has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500.
Institutional and Insider Ownership
51.6% of Annaly Capital Management shares are held by institutional investors. Comparatively, 54.9% of Adamas Trust shares are held by institutional investors. 0.2% of Annaly Capital Management shares are held by company insiders. Comparatively, 2.0% of Adamas Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current recommendations for Annaly Capital Management and Adamas Trust, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Annaly Capital Management | 0 | 4 | 7 | 1 | 2.75 |
| Adamas Trust | 0 | 4 | 1 | 1 | 2.50 |
Annaly Capital Management presently has a consensus price target of $24.33, suggesting a potential upside of 18.36%. Adamas Trust has a consensus price target of $9.50, suggesting a potential upside of 16.71%. Given Annaly Capital Management’s stronger consensus rating and higher probable upside, research analysts plainly believe Annaly Capital Management is more favorable than Adamas Trust.
Summary
Annaly Capital Management beats Adamas Trust on 12 of the 17 factors compared between the two stocks.
About Annaly Capital Management
Annaly Capital Management, Inc., a diversified capital manager, engages in mortgage finance. The company invests in agency mortgage-backed securities collateralized by residential mortgages; non-agency residential whole loans and securitized products within the residential and commercial markets; mortgage servicing rights; agency commercial mortgage-backed securities; to-be-announced forward contracts; residential mortgage loans; and agency or private label credit risk transfer securities. It has elected to be taxed as a real estate investment trust (REIT). As a REIT, it is not subject to federal income tax to the extent that it distributes its taxable income to its shareholders. The company was incorporated in 1996 and is based in New York, New York.
About Adamas Trust
New York Mortgage Trust, Inc. acquires, invests in, finances, and manages mortgage-related single-family and multi-family residential assets in the United States. Its targeted investments include residential loans, second mortgages, and business purpose loans; structured multi-family property investments, such as preferred equity in, and mezzanine loans to owners of multi-family properties, as well as joint venture equity investments in multi-family properties; non-agency residential mortgage-backed securities (RMBS); agency RMBS; commercial mortgage-backed securities (CMBS); and other mortgage, residential housing, and credit-related assets. 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 2003 and is headquartered in New York, New York.
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