RWT vs. DX, ARR, CIM, MFA, NYMT, PMT, IVR, TWO, ACRE, and RC
Should you be buying Redwood Trust stock or one of its competitors? The main competitors of Redwood Trust include Dynex Capital (DX), ARMOUR Residential REIT (ARR), Chimera Investment (CIM), MFA Financial (MFA), New York Mortgage Trust (NYMT), PennyMac Mortgage Investment Trust (PMT), Invesco Mortgage Capital (IVR), Two Harbors Investment (TWO), Ares Commercial Real Estate (ACRE), and Ready Capital (RC). These companies are all part of the "mortgage reits" industry.
Dynex Capital (NYSE:DX) and Redwood Trust (NYSE:RWT) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their media sentiment, risk, institutional ownership, valuation, profitability, earnings, analyst recommendations, dividends and community ranking.
38.3% of Dynex Capital shares are held by institutional investors. Comparatively, 74.3% of Redwood Trust shares are held by institutional investors. 1.0% of Dynex Capital shares are held by company insiders. Comparatively, 2.5% of Redwood Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Dynex Capital has a net margin of 30.50% compared to Dynex Capital's net margin of 3.06%. Dynex Capital's return on equity of 4.83% beat Redwood Trust's return on equity.
Redwood Trust has higher revenue and earnings than Dynex Capital. Dynex Capital is trading at a lower price-to-earnings ratio than Redwood Trust, indicating that it is currently the more affordable of the two stocks.
Redwood Trust received 116 more outperform votes than Dynex Capital when rated by MarketBeat users. Likewise, 65.46% of users gave Redwood Trust an outperform vote while only 59.68% of users gave Dynex Capital an outperform vote.
Dynex Capital presently has a consensus target price of $13.31, indicating a potential upside of 9.21%. Redwood Trust has a consensus target price of $7.66, indicating a potential upside of 20.95%. Given Dynex Capital's stronger consensus rating and higher probable upside, analysts plainly believe Redwood Trust is more favorable than Dynex Capital.
Dynex Capital pays an annual dividend of $1.56 per share and has a dividend yield of 12.8%. Redwood Trust pays an annual dividend of $0.64 per share and has a dividend yield of 10.1%. Dynex Capital pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Redwood Trust pays out 914.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dynex Capital has raised its dividend for 2 consecutive years. Dynex Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Dynex Capital has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500. Comparatively, Redwood Trust has a beta of 1.5, suggesting that its share price is 50% more volatile than the S&P 500.
In the previous week, Redwood Trust had 3 more articles in the media than Dynex Capital. MarketBeat recorded 3 mentions for Redwood Trust and 0 mentions for Dynex Capital. Dynex Capital's average media sentiment score of 1.78 beat Redwood Trust's score of 0.00 indicating that Redwood Trust is being referred to more favorably in the news media.
Summary
Redwood Trust beats Dynex Capital on 16 of the 22 factors compared between the two stocks.
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This chart shows the number of new MarketBeat users adding RWT and its top 5 competitors to their watchlist. Each company is represented with a line over a 90 day period.
This chart shows the average media sentiment of NYSE and its competitors over the past 90 days as caculated by MarketBeat. The averaged score is equivalent to the following: Very Negative Sentiment <= -1.5, Negative Sentiment > -1.5 and <= -0.5, Neutral Sentiment > -0.5 and < 0.5, Positive Sentiment >= 0.5 and < 1.5, and Very Positive Sentiment >= 1.5.
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