Financial Review: Annaly Capital Management (NYSE:NLY) versus Altisource Portfolio Solutions (NASDAQ:ASPS)

Altisource Portfolio Solutions (NASDAQ:ASPS) and Annaly Capital Management (NYSE:NLY) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, risk, profitability and valuation.

Volatility & Risk

Altisource Portfolio Solutions has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500. Comparatively, Annaly Capital Management has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500.

Earnings & Valuation

This table compares Altisource Portfolio Solutions and Annaly Capital Management”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Altisource Portfolio Solutions	$160.13 million	0.76	-$35.64 million	($4.36)	-2.55
Annaly Capital Management	$4.84 billion	2.79	$1.00 billion	$1.01	20.82

Annaly Capital Management has higher revenue and earnings than Altisource Portfolio Solutions. Altisource Portfolio Solutions 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 Altisource Portfolio Solutions and Annaly Capital Management’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Altisource Portfolio Solutions	-4.10%	N/A	-8.68%
Annaly Capital Management	13.76%	15.53%	1.68%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Altisource Portfolio Solutions and Annaly Capital Management, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Altisource Portfolio Solutions	0	0	0	0	0.00
Annaly Capital Management	0	4	6	0	2.60

Annaly Capital Management has a consensus target price of $20.81, indicating a potential downside of 1.03%. Given Annaly Capital Management’s stronger consensus rating and higher possible upside, analysts clearly believe Annaly Capital Management is more favorable than Altisource Portfolio Solutions.

Institutional & Insider Ownership

41.4% of Altisource Portfolio Solutions shares are owned by institutional investors. Comparatively, 51.6% of Annaly Capital Management shares are owned by institutional investors. 2.3% of Altisource Portfolio Solutions shares are owned by company insiders. Comparatively, 0.2% of Annaly Capital Management shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Annaly Capital Management beats Altisource Portfolio Solutions on 13 of the 14 factors compared between the two stocks.

About Altisource Portfolio Solutions

Altisource Portfolio Solutions S.A. operates as an integrated service provider and marketplace for the real estate and mortgage industries in the United States and internationally. It operates through Servicer and Real Estate, and Origination segments. The Servicer and Real Estate segment offers property preservation, inspection, title insurance and settlement, real estate valuation, foreclosure trustee, and residential and commercial construction inspection and risk mitigation services. This segment provides Hubzu, an online real estate auction platform, as well as real estate auction, real estate brokerage, and asset management services; Equator, a software-as-a-service technology to manage real estate owned, short sales, foreclosure, bankruptcy, and eviction processes; a vendor invoicing and payment system; RentRange, a single and multi-family rental data, analytics, and rent-based valuation solution; REALSynergy, a commercial loan servicing platform; and NestRange, an automated residential valuation model and analytics solution. The Origination segment offers loan fulfillment, certification and certification insurance services, management services. In addition, it provides Lendors One Loan Automation, a marketplace to order services and a tool to automate components of the loan manufacturing process; TrelixAI, a technology to manage the workflow and automate components of the loan fulfillment, pre and post close quality, and service transfer processes; and ADMS, a document management and data analytics delivery platform. The company serves financial institutions, government-sponsored enterprises, banks, asset managers, servicers, investors, property management firms, real estate brokerages, insurance companies, mortgage bankers, originators, and correspondent and private money lenders. Altisource Portfolio Solutions S.A. was incorporated in 1999 and is headquartered in Luxembourg City, Luxembourg.

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.