AGNC Investment (NASDAQ:AGNCO) versus Starwood Property Trust (NYSE:STWD) Critical Comparison

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

Profitability

This table compares Starwood Property Trust and AGNC Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Starwood Property Trust	11.35%	7.85%	0.89%
AGNC Investment	N/A	N/A	N/A

Dividends

Starwood Property Trust pays an annual dividend of $1.92 per share and has a dividend yield of 12.1%. AGNC Investment pays an annual dividend of $1.63 per share and has a dividend yield of 6.4%. Starwood Property Trust pays out 325.4% 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 recommendations for Starwood Property Trust and AGNC Investment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Starwood Property Trust	0	3	4	0	2.57
AGNC Investment	0	0	0	0	0.00

Starwood Property Trust currently has a consensus price target of $19.20, indicating a potential upside of 20.68%. Given Starwood Property Trust’s stronger consensus rating and higher possible upside, research analysts plainly believe Starwood Property Trust is more favorable than AGNC Investment.

Institutional and Insider Ownership

49.8% of Starwood Property Trust shares are owned by institutional investors. 5.8% of Starwood Property Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Starwood Property Trust and AGNC Investment”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Starwood Property Trust	$1.84 billion	3.19	$411.54 million	$0.59	26.97
AGNC Investment	$2.40 billion	N/A	N/A	N/A	N/A

Starwood Property Trust has higher earnings, but lower revenue than AGNC Investment.

Summary

Starwood Property Trust beats AGNC Investment on 9 of the 11 factors compared between the two stocks.

About Starwood Property Trust

Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States and internationally. The company operates through Commercial and Residential Lending, Infrastructure Lending, Property, and Investing and Servicing segments. The Commercial and Residential Lending segment originates, acquires, finances, and manages commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), and residential mortgage-backed securities, as well as other real estate and real estate-related debt investments, include distressed or non-performing loans. The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments. The Property segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment. The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets that include properties acquired from CMBS trusts. The company qualifies as a REIT for federal income tax purposes and 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 2009 and is headquartered in Greenwich, Connecticut.

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.