Hatteras Financial Corp. (NYSE: HTS) and Monogram Residential Trust (NYSE:MORE) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitabiliy and dividends.
Risk and Volatility
Hatteras Financial Corp. has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500. Comparatively, Monogram Residential Trust has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.
Insider & Institutional Ownership
74.6% of Monogram Residential Trust shares are held by institutional investors. 0.1% of Monogram Residential Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Hatteras Financial Corp. pays an annual dividend of $1.80 per share and has a dividend yield of 11.0%. Monogram Residential Trust pays an annual dividend of $0.30 per share and has a dividend yield of 3.0%. Hatteras Financial Corp. pays out 580.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Monogram Residential Trust pays out 54.5% of its earnings in the form of a dividend.
This table compares Hatteras Financial Corp. and Monogram Residential Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hatteras Financial Corp.||N/A||N/A||N/A|
|Monogram Residential Trust||32.49%||6.01%||2.93%|
This is a breakdown of recent recommendations for Hatteras Financial Corp. and Monogram Residential Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hatteras Financial Corp.||0||0||0||0||N/A|
|Monogram Residential Trust||0||2||5||0||2.71|
Monogram Residential Trust has a consensus price target of $11.54, suggesting a potential upside of 17.06%. Given Monogram Residential Trust’s higher possible upside, analysts plainly believe Monogram Residential Trust is more favorable than Hatteras Financial Corp..
Valuation & Earnings
This table compares Hatteras Financial Corp. and Monogram Residential Trust’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hatteras Financial Corp.||N/A||N/A||N/A||$0.31||52.55|
|Monogram Residential Trust||$288.53 million||5.71||$138.81 million||$0.55||17.93|
Monogram Residential Trust has higher revenue and earnings than Hatteras Financial Corp.. Monogram Residential Trust is trading at a lower price-to-earnings ratio than Hatteras Financial Corp., indicating that it is currently the more affordable of the two stocks.
Monogram Residential Trust beats Hatteras Financial Corp. on 11 of the 12 factors compared between the two stocks.
Hatteras Financial Corp. Company Profile
Hatteras Financial Corp. is an externally managed mortgage real estate investment trust (REIT) that invests in single-family residential mortgage real estate assets, such as mortgage-backed security (MBS), mortgage servicing right (MSR), residential mortgage loans and other financial assets. MBS are pass-through securities consisting of a pool of mortgage loans. Its primary business is owning and managing agency securities, with a primary focus on adjustable-rate mortgage securities. Its primary investment assets include Agency MBS; other agency issued securities, such as credit-risk transfer bonds; MSR; non-agency securities; residential mortgage loans, and other real estate related assets as permitted by its investment guidelines and REIT requirements. Its business operations consist of the Hatteras Financial Corp., Onslow Bay Financial LLC, First Winston Securities, Inc. and Wind River TRS LLC. It is externally managed and advised by its manager, Atlantic Capital Advisors LLC.
Monogram Residential Trust Company Profile
Monogram Residential Trust, Inc. is a self-managed real estate investment trust (REIT). The Company invests in, develops and operates multifamily communities offering location and lifestyle amenities. The Company also invests in stabilized operating communities and communities in various phases of development, with a focus on communities in select markets across the United States. These include luxury high-rise, mid-rise and garden style multifamily communities. As of December 31, 2016, Monogram’s portfolio includes investments in 51 multifamily communities in 10 states comprising 14,473 residential units. As of September 30, 2016, the Company held ownership interests in equity investments, including 47 operating multifamily communities (including one development in lease up) containing 13,022 residential units in 10 states, all of which are consolidated for financial reporting purposes.
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