Reviewing Dynex Capital (NYSE:DX) and CTO Realty Growth (NYSE:CTO)

CTO Realty Growth (NYSE:CTO) and Dynex Capital (NYSE:DX) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Insider & Institutional Ownership

67.2% of CTO Realty Growth shares are held by institutional investors. Comparatively, 38.3% of Dynex Capital shares are held by institutional investors. 5.3% of CTO Realty Growth shares are held by company insiders. Comparatively, 2.5% of Dynex Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares CTO Realty Growth and Dynex Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CTO Realty Growth	17.10%	4.04%	1.92%
Dynex Capital	35.65%	-2.24%	-0.30%

Volatility & Risk

CTO Realty Growth has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Dynex Capital has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.

Dividends

CTO Realty Growth pays an annual dividend of $1.52 per share and has a dividend yield of 7.5%. Dynex Capital pays an annual dividend of $1.80 per share and has a dividend yield of 13.6%. CTO Realty Growth pays out 257.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dynex Capital pays out 122.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dynex Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current recommendations for CTO Realty Growth and Dynex Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CTO Realty Growth	0	0	1	2	3.67
Dynex Capital	0	1	4	0	2.80

CTO Realty Growth currently has a consensus price target of $21.00, indicating a potential upside of 3.73%. Dynex Capital has a consensus price target of $13.56, indicating a potential upside of 2.40%. Given CTO Realty Growth’s stronger consensus rating and higher possible upside, research analysts clearly believe CTO Realty Growth is more favorable than Dynex Capital.

Earnings & Valuation

This table compares CTO Realty Growth and Dynex Capital”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CTO Realty Growth	$109.12 million	5.56	$5.53 million	$0.59	34.31
Dynex Capital	$319.53 million	3.29	$113.90 million	$1.47	9.01

Dynex Capital has higher revenue and earnings than CTO Realty Growth. Dynex Capital is trading at a lower price-to-earnings ratio than CTO Realty Growth, indicating that it is currently the more affordable of the two stocks.

Summary

CTO Realty Growth beats Dynex Capital on 9 of the 17 factors compared between the two stocks.

About CTO Realty Growth

CTO Realty Growth, Inc. is a publicly traded real estate investment trust that owns and operates a portfolio of high-quality, retail-based properties located primarily in higher growth markets in the United States. CTO also externally manages and owns a meaningful interest in Alpine Income Property Trust, Inc. (NYSE: PINE), a publicly traded net lease REIT.

About Dynex Capital

Dynex Capital, Inc., a mortgage real estate investment trust, invests in mortgage-backed securities (MBS) on a leveraged basis in the United States. It invests in agency and non-agency MBS consisting of residential MBS, commercial MBS (CMBS), and CMBS interest-only securities. Agency MBS have a guaranty of principal payment by an agency of the U.S. government or a U.S. government-sponsored entity, such as Fannie Mae and Freddie Mac. Non-Agency MBS have no such guaranty of payment. The company has qualified as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders as dividends. Dynex Capital, Inc. was incorporated in 1987 and is headquartered in Glen Allen, Virginia.