New Residential Investment Corp. (NYSE: NRZ) and Great Ajax Corp. (NYSE:AJX) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, profitability, valuation and risk.
Volatility & Risk
New Residential Investment Corp. has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, Great Ajax Corp. has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.
Institutional & Insider Ownership
48.1% of New Residential Investment Corp. shares are held by institutional investors. Comparatively, 75.0% of Great Ajax Corp. shares are held by institutional investors. 4.0% of New Residential Investment Corp. shares are held by insiders. Comparatively, 3.8% of Great Ajax Corp. shares are held 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.
This is a summary of recent ratings and price targets for New Residential Investment Corp. and Great Ajax Corp., as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|New Residential Investment Corp.||0||2||5||0||2.71|
|Great Ajax Corp.||0||3||2||0||2.40|
New Residential Investment Corp. currently has a consensus target price of $17.63, suggesting a potential upside of 1.06%. Great Ajax Corp. has a consensus target price of $15.00, suggesting a potential upside of 6.46%. Given Great Ajax Corp.’s higher possible upside, analysts plainly believe Great Ajax Corp. is more favorable than New Residential Investment Corp..
New Residential Investment Corp. pays an annual dividend of $2.00 per share and has a dividend yield of 11.5%. Great Ajax Corp. pays an annual dividend of $1.20 per share and has a dividend yield of 8.5%. New Residential Investment Corp. pays out 64.7% of its earnings in the form of a dividend. Great Ajax Corp. pays out 76.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Great Ajax Corp. has raised its dividend for 3 consecutive years. New Residential Investment Corp. is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares New Residential Investment Corp. and Great Ajax Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|New Residential Investment Corp.||60.06%||20.02%||4.04%|
|Great Ajax Corp.||58.46%||10.22%||3.02%|
Valuation and Earnings
This table compares New Residential Investment Corp. and Great Ajax Corp.’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|New Residential Investment Corp.||$1.30 billion||4.12||$949.75 million||$3.09||5.64|
|Great Ajax Corp.||$50.65 million||4.90||$27.67 million||$1.57||8.97|
New Residential Investment Corp. has higher revenue and earnings than Great Ajax Corp.. New Residential Investment Corp. is trading at a lower price-to-earnings ratio than Great Ajax Corp., indicating that it is currently the more affordable of the two stocks.
New Residential Investment Corp. beats Great Ajax Corp. on 12 of the 17 factors compared between the two stocks.
New Residential Investment Corp. Company Profile
New Residential Investment Corp. is a real estate investment trust (REIT). The Company focuses on investing in, and managing, investments related to residential real estate. The Company’s segments include investments in excess mortgage servicing rights (Excess MSRs); investments in mortgage servicing rights (MSRs); investments in servicer advances; investments in real estate securities; investments in residential mortgage loans; investments in consumer loans, and corporate. Its portfolio includes mortgage servicing related assets, residential mortgage backed securities (RMBS), residential mortgage loans and other investments. The Company’s servicing related assets include its investments in Excess MSRs, MSRs and servicer advances. The Company invests in agency RMBS and non-agency RMBS. The Company’s other investments consist of consumer loans.
Great Ajax Corp. Company Profile
Great Ajax Corp. is an externally managed real estate company. The Company is focused on acquiring, investing in and managing a portfolio of re-performing and non-performing mortgage loans secured by single-family residences and single-family properties. Its segment is focused on non-performing mortgages and re-performing mortgages. It also invests in loans secured by multi-family residential and commercial mixed use retail/residential properties, as well as in the properties directly. It also holds real estate-owned properties (REO) acquired upon the foreclosure or other settlement of its owned non-performing loans, as well as through outright purchases. It is managed by Thetis Asset Management LLC, an affiliated entity. Its mortgage loans and other real estate assets are serviced by Gregory Funding LLC, an affiliated entity. The Company conducts its business through its operating partnership, Great Ajax Operating Partnership L.P.
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