Comparing ARMOUR Residential REIT (NYSE:ARR) & BrightSpire Capital (NYSE:BRSP)

ARMOUR Residential REIT (NYSE:ARR) and BrightSpire Capital (NYSE:BRSP) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Earnings and Valuation

This table compares ARMOUR Residential REIT and BrightSpire Capital”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARMOUR Residential REIT	$800.42 million	2.73	$322.69 million	$1.92	9.18
BrightSpire Capital	$194.89 million	3.99	-$31.15 million	($0.27)	-22.13

ARMOUR Residential REIT has higher revenue and earnings than BrightSpire Capital. BrightSpire Capital is trading at a lower price-to-earnings ratio than ARMOUR Residential REIT, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for ARMOUR Residential REIT and BrightSpire Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARMOUR Residential REIT	1	2	2	0	2.20
BrightSpire Capital	1	1	4	0	2.50

ARMOUR Residential REIT presently has a consensus price target of $18.50, indicating a potential upside of 4.98%. BrightSpire Capital has a consensus price target of $6.75, indicating a potential upside of 12.97%. Given BrightSpire Capital’s stronger consensus rating and higher possible upside, analysts clearly believe BrightSpire Capital is more favorable than ARMOUR Residential REIT.

Risk and Volatility

ARMOUR Residential REIT has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500. Comparatively, BrightSpire Capital has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Dividends

ARMOUR Residential REIT pays an annual dividend of $2.88 per share and has a dividend yield of 16.3%. BrightSpire Capital pays an annual dividend of $0.64 per share and has a dividend yield of 10.7%. ARMOUR Residential REIT pays out 150.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BrightSpire Capital pays out -237.0% of its earnings in the form of a dividend.

Profitability

This table compares ARMOUR Residential REIT and BrightSpire Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARMOUR Residential REIT	27.43%	15.39%	1.65%
BrightSpire Capital	-24.16%	7.46%	2.03%

Institutional & Insider Ownership

54.2% of ARMOUR Residential REIT shares are held by institutional investors. Comparatively, 56.6% of BrightSpire Capital shares are held by institutional investors. 0.2% of ARMOUR Residential REIT shares are held by insiders. Comparatively, 2.8% of BrightSpire Capital shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

About ARMOUR Residential REIT

ARMOUR Residential REIT, Inc. invests in residential mortgage-backed securities (MBS) in the United States. Its securities portfolio primarily consists of the United States Government-sponsored entity's (GSE) and the Government National Mortgage Administration's issued or guaranteed securities backed by fixed rate, hybrid adjustable rate, and adjustable-rate home loans; and unsecured notes and bonds issued by the GSE and the United States treasuries, as well as money market instruments. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. ARMOUR Residential REIT, Inc. was incorporated in 2008 and is based in Vero Beach, Florida.

About BrightSpire Capital

BrightSpire Capital, Inc. operates as a commercial real estate (CRE) credit real estate investment trust in the United States and Europe. The company operates through Senior and Mezzanine Loans and Preferred Equity; Net Leased and Other Real Estate; and Corporate and Other segments. It focuses on originating, acquiring, financing, and managing a diversified portfolio of CRE debt investments consisting of first mortgage loans, senior loans, debt securities, mezzanine loans, and preferred equity investments, as well as net leased properties. 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 Colony Credit Real Estate, Inc. and changed its name to BrightSpire Capital, Inc. in June 2021. BrightSpire Capital, Inc. was incorporated in 2017 and is headquartered in New York, New York.