Critical Comparison: Angel Oak Mortgage REIT (NYSE:AOMR) vs. Dynex Capital (NYSE:DX)

Dynex Capital (NYSE:DX) and Angel Oak Mortgage REIT (NYSE:AOMR) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Volatility and Risk

Dynex Capital has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, Angel Oak Mortgage REIT has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Dynex Capital and Angel Oak Mortgage REIT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dynex Capital	0	3	2	0	2.40
Angel Oak Mortgage REIT	0	3	3	0	2.50

Dynex Capital currently has a consensus price target of $13.92, indicating a potential downside of 0.74%. Angel Oak Mortgage REIT has a consensus price target of $11.06, indicating a potential upside of 29.39%. Given Angel Oak Mortgage REIT’s stronger consensus rating and higher probable upside, analysts plainly believe Angel Oak Mortgage REIT is more favorable than Dynex Capital.

Earnings and Valuation

This table compares Dynex Capital and Angel Oak Mortgage REIT”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dynex Capital	$319.53 million	6.44	$113.90 million	$1.48	9.47
Angel Oak Mortgage REIT	$110.43 million	1.93	$28.75 million	$0.71	12.04

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

Dividends

Dynex Capital pays an annual dividend of $2.04 per share and has a dividend yield of 14.6%. Angel Oak Mortgage REIT pays an annual dividend of $1.28 per share and has a dividend yield of 15.0%. Dynex Capital pays out 137.8% 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. Dynex Capital has increased its dividend for 5 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Dynex Capital	41.53%	6.65%	0.89%
Angel Oak Mortgage REIT	12.93%	6.42%	0.63%

Insider & Institutional Ownership

38.3% of Dynex Capital shares are owned by institutional investors. Comparatively, 80.2% of Angel Oak Mortgage REIT shares are owned by institutional investors. 1.0% of Dynex Capital shares are owned by insiders. Comparatively, 2.9% of Angel Oak Mortgage REIT shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Dynex Capital beats Angel Oak Mortgage REIT on 9 of the 17 factors compared between the two stocks.

About Dynex Capital

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 as dividends. Dynex Capital, Inc. was incorporated in 1987 and is headquartered in Glen Allen, Virginia.

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.