MTGE Investment (MTGE) & Great Ajax (AJX) Head to Head Analysis

MTGE Investment (NASDAQ: MTGE) and Great Ajax (NYSE:AJX) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares MTGE Investment and Great Ajax’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MTGE Investment 89.01% 10.52% 1.72%
Great Ajax 55.23% 10.04% 2.77%

Institutional & Insider Ownership

74.5% of MTGE Investment shares are owned by institutional investors. Comparatively, 71.4% of Great Ajax shares are owned by institutional investors. 1.1% of MTGE Investment shares are owned by insiders. Comparatively, 3.8% of Great Ajax shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares MTGE Investment and Great Ajax’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MTGE Investment $108.19 million 7.87 $43.67 million $1.80 10.33
Great Ajax $44.69 million 5.87 $27.83 million $1.53 9.40

MTGE Investment has higher revenue and earnings than Great Ajax. Great Ajax is trading at a lower price-to-earnings ratio than MTGE Investment, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

MTGE Investment has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500. Comparatively, Great Ajax has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Dividends

MTGE Investment pays an annual dividend of $1.80 per share and has a dividend yield of 9.7%. Great Ajax pays an annual dividend of $1.20 per share and has a dividend yield of 8.3%. MTGE Investment pays out 100.0% 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 pays out 78.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of current ratings and price targets for MTGE Investment and Great Ajax, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MTGE Investment 0 1 3 0 2.75
Great Ajax 0 1 3 0 2.75

MTGE Investment presently has a consensus price target of $20.50, indicating a potential upside of 10.22%. Great Ajax has a consensus price target of $14.75, indicating a potential upside of 2.57%. Given MTGE Investment’s higher possible upside, analysts clearly believe MTGE Investment is more favorable than Great Ajax.

Summary

MTGE Investment beats Great Ajax on 9 of the 14 factors compared between the two stocks.

MTGE Investment Company Profile

MTGE Investment Corp., formerly American Capital Mortgage Investment Corp., is a real estate investment trust. The Company invests in, finances and manages a leveraged portfolio of real estate-related investments, which include agency residential mortgage-backed securities (RMBS), non-agency securities, other mortgage-related investments and other real estate investments. Agency RMBS includes residential mortgage pass-through certificates and collateralized mortgage obligations (CMOs) structured from residential mortgage pass-through certificates for which the principal and interest payments are guaranteed by a government-sponsored enterprise (GSE), or by a United States Government agency, such as Government National Mortgage Association (Ginnie Mae). Non-agency securities include securities backed by residential mortgages that are not guaranteed by a GSE or the United States Government agency, and credit risk transfer securities (CRT). The Company’s manager is MTGE Management, LLC.

Great Ajax 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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