Financial Analysis: Orchid Island Capital (NYSE:ORC) versus Blackstone (NYSE:BX)

Blackstone (NYSE:BX) and Orchid Island Capital (NYSE:ORC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.

Dividends

Blackstone pays an annual dividend of $5.16 per share and has a dividend yield of 3.8%. Orchid Island Capital pays an annual dividend of $1.20 per share and has a dividend yield of 18.3%. Blackstone pays out 115.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Orchid Island Capital pays out 81.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Orchid Island Capital has raised its dividend for 1 consecutive years. Orchid Island Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Blackstone and Orchid Island Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Blackstone	21.84%	23.77%	10.06%
Orchid Island Capital	N/A	11.87%	1.35%

Volatility and Risk

Blackstone has a beta of 1.56, indicating that its stock price is 56% more volatile than the S&P 500. Comparatively, Orchid Island Capital has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500.

Insider and Institutional Ownership

70.0% of Blackstone shares are held by institutional investors. Comparatively, 32.7% of Orchid Island Capital shares are held by institutional investors. 1.0% of Blackstone shares are held by insiders. Comparatively, 0.3% of Orchid Island 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.

Valuation & Earnings

This table compares Blackstone and Orchid Island Capital”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blackstone	$13.61 billion	7.50	$3.02 billion	$4.47	30.44
Orchid Island Capital	$414.00 million	3.17	$159.03 million	$1.48	4.44

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

Analyst Recommendations

This is a summary of current recommendations for Blackstone and Orchid Island Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blackstone	0	11	13	0	2.54
Orchid Island Capital	1	2	0	0	1.67

Blackstone presently has a consensus price target of $149.43, indicating a potential upside of 9.82%. Orchid Island Capital has a consensus price target of $7.50, indicating a potential upside of 14.16%. Given Orchid Island Capital’s higher possible upside, analysts clearly believe Orchid Island Capital is more favorable than Blackstone.

Summary

Blackstone beats Orchid Island Capital on 13 of the 17 factors compared between the two stocks.

About Blackstone

Blackstone Inc. is an alternative asset management firm specializing in real estate, private equity, hedge fund solutions, credit, secondary funds of funds, public debt and equity and multi-asset class strategies. The firm typically invests in early-stage companies. It also provide capital markets services. The real estate segment specializes in opportunistic, core+ investments as well as debt investment opportunities collateralized by commercial real estate, and stabilized income-oriented commercial real estate across North America, Europe and Asia. The firm's corporate private equity business pursues transactions throughout the world across a variety of transaction types, including large buyouts,special situations, distressed mortgage loans, mid-cap buyouts, buy and build platforms, which involves multiple acquisitions behind a single management team and platform, and growth equity/development projects involving significant majority stakes in portfolio companies and minority investments in operating companies, shipping, real estate, corporate or consumer loans, and alternative energy greenfield development projects in energy and power, property, dislocated markets, shipping opportunities, financial institution breakups, re-insurance, and improving freight mobility, financial services, healthcare, life sciences, infrastructure, enterprise tech and consumer, as well as consumer technologies. The firm considers investment in Asia and Latin America. It seeks to invest between $0.25 million and $900 million per transaction. It invests in companies with enterprise value between $500 million and $5000 million. It has a three year investment period. Its hedge fund business manages a broad range of commingled and customized fund solutions and its credit business focuses on loans, and securities of non-investment grade companies spread across the capital structure including senior debt, subordinated debt, preferred stock and common equity. Blackstone Inc. was founded in 1985 and is headquartered in New York, New York with additional offices across Asia, Europe, North America and Central America.

About Orchid Island Capital

Orchid Island Capital, Inc., a specialty finance company, invests in residential mortgage-backed securities (RMBS) in the United States. The company’s RMBS is backed by single-family residential mortgage loans, referred as Agency RMBS. Its portfolio includes traditional pass-through Agency RMBS, such as mortgage pass through certificates and collateralized mortgage obligations; and structured Agency RMBS comprising interest only securities, inverse interest only securities, and principal only securities. The company has elected to be taxed as a real estate investment trust (REIT) for the United States federal income tax purposes. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to stockholders, if it annually distributes dividends equal to at least 90% of its REIT taxable income to its stockholders. Orchid Island Capital, Inc. was incorporated in 2010 and is headquartered in Vero Beach, Florida.