Head to Head Analysis: Dynex Capital (NYSE:DX) vs. STORE Capital (NYSE:STOR)

Dynex Capital (NYSE:DXGet Rating) and STORE Capital (NYSE:STORGet Rating) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, risk, valuation and dividends.

Earnings and Valuation

This table compares Dynex Capital and STORE Capital’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dynex Capital $60.05 million 9.11 $102.26 million $3.45 4.32
STORE Capital $782.66 million 10.62 $268.35 million $1.00 29.72

STORE Capital has higher revenue and earnings than Dynex Capital. Dynex Capital is trading at a lower price-to-earnings ratio than STORE Capital, indicating that it is currently the more affordable of the two stocks.

Dividends

Dynex Capital pays an annual dividend of $1.56 per share and has a dividend yield of 10.5%. STORE Capital pays an annual dividend of $1.54 per share and has a dividend yield of 5.2%. Dynex Capital pays out 45.2% of its earnings in the form of a dividend. STORE Capital pays out 154.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. STORE Capital has raised its dividend for 7 consecutive years. Dynex Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

40.9% of Dynex Capital shares are held by institutional investors. Comparatively, 84.6% of STORE Capital shares are held by institutional investors. 2.5% of Dynex Capital shares are held by insiders. Comparatively, 0.9% of STORE Capital shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Dynex Capital has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, STORE Capital has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Dynex Capital and STORE Capital, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dynex Capital 0 1 1 0 2.50
STORE Capital 1 5 1 0 2.00

Dynex Capital presently has a consensus price target of $20.00, indicating a potential upside of 34.05%. STORE Capital has a consensus price target of $35.00, indicating a potential upside of 17.77%. Given Dynex Capital’s stronger consensus rating and higher possible upside, analysts plainly believe Dynex Capital is more favorable than STORE Capital.

Profitability

This table compares Dynex Capital and STORE Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dynex Capital 170.29% 9.87% 1.92%
STORE Capital 34.29% 5.08% 2.76%

About Dynex Capital (Get Rating)

Dynex Capital, Inc., a mortgage real estate investment trust, invests in mortgage-backed securities (MBS) on a leveraged basis in the United States. It invests in agency and non-agency MBS consisting of residential MBS, commercial MBS (CMBS), and CMBS interest-only securities. Agency MBS have a guaranty of principal payment by an agency of the U.S. government or a U.S. government-sponsored entity, such as Fannie Mae and Freddie Mac. Non-Agency MBS have no such guaranty of payment. The company has qualified as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was incorporated in 1987 and is headquartered in Glen Allen, Virginia.

About STORE Capital (Get Rating)

STORE Capital Corporation is an internally managed net-lease real estate investment trust, or REIT, that is the leader in the acquisition, investment and management of Single Tenant Operational Real Estate, which is its target market and the inspiration for its name. STORE Capital is one of the largest and fastest growing net-lease REITs and owns a large, well-diversified portfolio that consists of investments in more than 2,500 property locations across the United States, substantially all of which are profit centers.

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