Reviewing MFA Financial (MFA) and The Competition

MFA Financial (NYSE: MFA) is one of 37 publicly-traded companies in the “Mortgage REITs” industry, but how does it contrast to its peers? We will compare MFA Financial to similar companies based on the strength of its risk, analyst recommendations, institutional ownership, profitability, earnings, dividends and valuation.

Volatility and Risk

MFA Financial has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, MFA Financial’s peers have a beta of 0.71, suggesting that their average stock price is 29% less volatile than the S&P 500.

Insider and Institutional Ownership

80.2% of MFA Financial shares are held by institutional investors. Comparatively, 57.6% of shares of all “Mortgage REITs” companies are held by institutional investors. 0.9% of MFA Financial shares are held by company insiders. Comparatively, 3.3% of shares of all “Mortgage REITs” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

MFA Financial pays an annual dividend of $0.80 per share and has a dividend yield of 9.5%. MFA Financial pays out 102.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Mortgage REITs” companies pay a dividend yield of 10.2% and pay out 81.8% of their earnings in the form of a dividend. MFA Financial lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

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 61.94% 10.12% 2.58%
MFA Financial Competitors 49.52% 10.44% 2.69%

Analyst Ratings

This is a summary of recent ratings and target prices for MFA Financial and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MFA Financial 0 3 2 0 2.40
MFA Financial Competitors 118 848 853 32 2.43

MFA Financial presently has a consensus target price of $8.50, indicating a potential upside of 1.19%. As a group, “Mortgage REITs” companies have a potential upside of 4.66%. Given MFA Financial’s peers stronger consensus rating and higher probable upside, analysts clearly believe MFA Financial has less favorable growth aspects than its peers.

Valuation and Earnings

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

Gross Revenue EBITDA Price/Earnings Ratio
MFA Financial $376.15 million N/A 10.77
MFA Financial Competitors $320.94 million $123.24 million 1.14

MFA Financial has higher revenue, but lower earnings than its peers. MFA Financial is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Summary

MFA Financial peers beat MFA Financial on 10 of the 14 factors compared.

About MFA Financial

MFA Financial, Inc. is engaged in the real estate finance business. The Company’s subsidiaries invest in residential mortgage assets, including Non-Agency mortgage-backed securities (MBS), Agency MBS, residential whole loans and credit risk transfer (CRT) securities. The Company’s Non-Agency MBS portfolio primarily consists of Legacy Non-Agency MBS and 3 Year Step-up securities. In addition to Non-Agency MBS investments, the Company invests in re-performing and non-performing residential whole loans through its interests in certain consolidated trusts. The mortgages collateralizing its Agency MBS portfolio are predominantly Hybrids, 15-year fixed-rate mortgages and adjustable-rate mortgages (ARMs).

Receive News & Ratings for MFA Financial Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for MFA Financial Inc. and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply