Financial Survey: AGNC Investment (NASDAQ:AGNC) & Angel Oak Mortgage REIT (NYSE:AOMR)

AGNC Investment (NASDAQ:AGNC) and Angel Oak Mortgage REIT (NYSE:AOMR) 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, risk, valuation, profitability, institutional ownership and earnings.

Insider & Institutional Ownership

38.3% of AGNC Investment shares are held by institutional investors. Comparatively, 80.2% of Angel Oak Mortgage REIT shares are held by institutional investors. 0.4% of AGNC Investment shares are held by company insiders. Comparatively, 2.9% of Angel Oak Mortgage REIT shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

AGNC Investment has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500. Comparatively, Angel Oak Mortgage REIT has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500.

Dividends

AGNC Investment pays an annual dividend of $1.44 per share and has a dividend yield of 13.3%. Angel Oak Mortgage REIT pays an annual dividend of $1.28 per share and has a dividend yield of 14.7%. AGNC Investment pays out 214.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Angel Oak Mortgage REIT pays out 180.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Angel Oak Mortgage REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares AGNC Investment and Angel Oak Mortgage REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AGNC Investment	24.40%	18.84%	1.66%
Angel Oak Mortgage REIT	12.93%	6.42%	0.63%

Analyst Recommendations

This is a breakdown of current ratings for AGNC Investment and Angel Oak Mortgage REIT, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AGNC Investment	0	4	6	0	2.60
Angel Oak Mortgage REIT	0	3	4	0	2.57

AGNC Investment presently has a consensus target price of $10.39, indicating a potential downside of 4.30%. Angel Oak Mortgage REIT has a consensus target price of $11.45, indicating a potential upside of 31.14%. Given Angel Oak Mortgage REIT’s higher probable upside, analysts plainly believe Angel Oak Mortgage REIT is more favorable than AGNC Investment.

Valuation & Earnings

This table compares AGNC Investment and Angel Oak Mortgage REIT”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AGNC Investment	$2.95 billion	3.95	$863.00 million	$0.67	16.21
Angel Oak Mortgage REIT	$110.43 million	1.97	$28.75 million	$0.71	12.30

AGNC Investment has higher revenue and earnings than Angel Oak Mortgage REIT. Angel Oak Mortgage REIT is trading at a lower price-to-earnings ratio than AGNC Investment, indicating that it is currently the more affordable of the two stocks.

Summary

AGNC Investment beats Angel Oak Mortgage REIT on 9 of the 15 factors compared between the two stocks.

About AGNC Investment

AGNC Investment Corp., formerly American Capital Agency Corp., is a real estate investment trust. The Company invests in agency residential mortgage-backed securities on a leveraged basis. Its investments consist of residential mortgage pass-through securities and collateralized mortgage obligations (CMOs) for which the principal and interest payments are guaranteed by a government-sponsored enterprise, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), or by the United States Government agency, such as the Government National Mortgage Association (Ginnie Mae) (collectively, GSEs). Its agency securities include agency residential mortgage-backed securities (Agency RMBS) and to-be-announced forward contracts (TBAs). Its Non-Agency Securities include credit risk transfer securities (CRT), non-agency residential mortgage-backed securities (Non-Agency RMBS) and commercial mortgage-backed securities (CMBS).

About Angel Oak Mortgage REIT

Angel Oak Mortgage REIT, Inc., a real estate finance company, focuses on acquiring and investing in first lien non- qualified mortgage loans and other mortgage-related assets in the United States mortgage market. It offers investment securities; residential mortgage loans; and commercial mortgage loans. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was incorporated in 2018 and is headquartered in Atlanta, Georgia.