Comparing AGNC Investment (NASDAQ:AGNCO) and MFA Financial (NYSE:MFA)

AGNC Investment (NASDAQ:AGNCO) and MFA Financial (NYSE:MFA) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.

Institutional and Insider Ownership

65.3% of MFA Financial shares are owned by institutional investors. 1.0% of MFA Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for AGNC Investment and MFA Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AGNC Investment	0	0	0	0	0.00
MFA Financial	0	3	4	0	2.57

MFA Financial has a consensus price target of $10.46, suggesting a potential upside of 17.25%. Given MFA Financial’s stronger consensus rating and higher possible upside, analysts clearly believe MFA Financial is more favorable than AGNC Investment.

Dividends

AGNC Investment pays an annual dividend of $1.63 per share and has a dividend yield of 6.3%. MFA Financial pays an annual dividend of $1.44 per share and has a dividend yield of 16.1%. MFA Financial pays out 144.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MFA Financial has increased its dividend for 1 consecutive years. MFA Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares AGNC Investment and MFA Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AGNC Investment	$2.40 billion	N/A	N/A	N/A	N/A
MFA Financial	$745.06 million	1.21	$176.78 million	$1.00	8.92

MFA Financial has lower revenue, but higher earnings than AGNC Investment.

Profitability

This table compares AGNC Investment and MFA Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AGNC Investment	N/A	N/A	N/A
MFA Financial	19.38%	7.58%	1.05%

Summary

MFA Financial beats AGNC Investment on 10 of the 12 factors compared between the two stocks.

About AGNC Investment

AGNC Investment Corp. provides private capital to housing market in the United States. It invests in residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by the United States government-sponsored enterprise or by the United States government agency. 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 formerly known as American Capital Agency Corp. and changed its name to AGNC Investment Corp. in September 2016. AGNC Investment Corp. was incorporated in 2008 and is headquartered in Bethesda, Maryland.

About MFA Financial

MFA Financial, Inc., together with its subsidiaries, operates as a real estate investment trust in the United States. It invests in residential mortgage securities, including non-agency mortgage-backed securities, agency MBS, and credit risk transfer securities; residential whole loans, including purchased performing loans, purchased credit deteriorated, and non-performing loans; and mortgage servicing rights related assets. The company was incorporated in 1997 and is based in New York, New York.