Head to Head Contrast: Annaly Capital Management (NYSE:NLY) versus Sun Communities (NYSE:SUI)

Annaly Capital Management (NYSE:NLYGet Rating) and Sun Communities (NYSE:SUIGet Rating) are both large-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, earnings, institutional ownership, profitability and dividends.

Insider & Institutional Ownership

52.8% of Annaly Capital Management shares are held by institutional investors. Comparatively, 93.3% of Sun Communities shares are held by institutional investors. 0.3% of Annaly Capital Management shares are held by insiders. Comparatively, 2.3% of Sun Communities shares are held by 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.

Volatility and Risk

Annaly Capital Management has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500. Comparatively, Sun Communities has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500.

Valuation & Earnings

This table compares Annaly Capital Management and Sun Communities’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Annaly Capital Management $1.98 billion 5.22 $2.39 billion $8.02 2.76
Sun Communities $2.27 billion 7.82 $392.25 million $2.05 69.97

Annaly Capital Management has higher earnings, but lower revenue than Sun Communities. Annaly Capital Management is trading at a lower price-to-earnings ratio than Sun Communities, indicating that it is currently the more affordable of the two stocks.

Dividends

Annaly Capital Management pays an annual dividend of $3.52 per share and has a dividend yield of 15.9%. Sun Communities pays an annual dividend of $3.52 per share and has a dividend yield of 2.5%. Annaly Capital Management pays out 43.9% of its earnings in the form of a dividend. Sun Communities pays out 171.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sun Communities has raised its dividend for 6 consecutive years. Annaly Capital Management is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Annaly Capital Management and Sun Communities’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Annaly Capital Management 126.07% 18.29% 2.38%
Sun Communities 8.81% 3.34% 1.66%

Analyst Ratings

This is a breakdown of current recommendations for Annaly Capital Management and Sun Communities, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Annaly Capital Management 0 4 5 0 2.56
Sun Communities 0 1 7 0 2.88

Annaly Capital Management presently has a consensus target price of $22.55, indicating a potential upside of 1.85%. Sun Communities has a consensus target price of $168.86, indicating a potential upside of 17.72%. Given Sun Communities’ stronger consensus rating and higher probable upside, analysts clearly believe Sun Communities is more favorable than Annaly Capital Management.

Summary

Sun Communities beats Annaly Capital Management on 9 of the 17 factors compared between the two stocks.

About Annaly Capital Management

(Get Rating)

Annaly Capital Management, Inc., a diversified capital manager, engages in mortgage finance and corporate middle market lending. The company invests in agency mortgage-backed securities, mortgage servicing rights, Agency commercial mortgage-backed securities, non-Agency residential mortgage assets, residential mortgage loans, credit risk transfer securities, corporate debts, and other commercial real estate investments. 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 founded in 1996 and is based in New York, New York.

About Sun Communities

(Get Rating)

Sun Communities, Inc. is a REIT that, as of March 31, 2022, owned, operated, or had an interest in a portfolio of 603 developed MH, RV and marina properties comprising nearly 159,300 developed sites and over 45,700 wet slips and dry storage spaces in 39 states, Canada, Puerto Rico and the UK.

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