CYS Investments (NYSE: CYS) and AG Mortgage Investment Trust (NYSE:MITT) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.

Risk & Volatility

CYS Investments has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, AG Mortgage Investment Trust has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Profitability

This table compares CYS Investments and AG Mortgage Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CYS Investments -5.86% 12.69% 1.39%
AG Mortgage Investment Trust 85.21% 11.97% 2.12%

Dividends

CYS Investments pays an annual dividend of $1.00 per share and has a dividend yield of 11.5%. AG Mortgage Investment Trust pays an annual dividend of $1.90 per share and has a dividend yield of 9.9%. CYS Investments pays out -400.0% of its earnings in the form of a dividend. AG Mortgage Investment Trust pays out 58.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. CYS Investments is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares CYS Investments and AG Mortgage Investment Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CYS Investments $6.14 million 215.76 -$37.94 million ($0.25) -34.92
AG Mortgage Investment Trust $119.69 million 4.45 $89.88 million $3.23 5.93

AG Mortgage Investment Trust has higher revenue and earnings than CYS Investments. CYS Investments is trading at a lower price-to-earnings ratio than AG Mortgage Investment Trust, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

62.8% of CYS Investments shares are held by institutional investors. Comparatively, 64.7% of AG Mortgage Investment Trust shares are held by institutional investors. 1.0% of CYS Investments shares are held by insiders. Comparatively, 1.6% of AG Mortgage Investment Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for CYS Investments and AG Mortgage Investment Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CYS Investments 2 3 0 0 1.60
AG Mortgage Investment Trust 0 3 0 0 2.00

CYS Investments presently has a consensus target price of $8.13, suggesting a potential downside of 6.93%. AG Mortgage Investment Trust has a consensus target price of $18.17, suggesting a potential downside of 5.13%. Given AG Mortgage Investment Trust’s stronger consensus rating and higher probable upside, analysts clearly believe AG Mortgage Investment Trust is more favorable than CYS Investments.

Summary

AG Mortgage Investment Trust beats CYS Investments on 10 of the 14 factors compared between the two stocks.

CYS Investments Company Profile

CYS Investments, Inc. is a specialty finance company. The Company’s objective is to provide consistent returns to its investors through a combination of dividends and capital appreciation. It invests in agency residential mortgage-backed security (RMBS) collateralized by fixed rate single-family residential mortgage loans; adjustable-rate mortgages (ARMs), which have coupon rates that reset monthly, or hybrid ARMs, which have a coupon rate that is fixed for an initial period. In addition, it has investments in collateralized mortgage obligations issued by a government agency or government-sponsored entity (GSE) that are collateralized by Agency RMBS. Its investments consist of residential mortgage pass-through securities for which the principal and interest payments are guaranteed by a GSE, such as Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, or by the United States Government agency, such as Government National Mortgage Association.

AG Mortgage Investment Trust Company Profile

AG Mortgage Investment Trust, Inc. is a real estate investment trust (REIT). The Company focuses on investing in, acquiring and managing a diversified portfolio of residential mortgage assets, other real estate-related securities and financial assets, which the Company refers to as its target assets. It also focuses on investing in residential mortgage-backed securities (RMBS) issued or guaranteed by a government-sponsored enterprise, such as The Federal National Mortgage Association (Fannie Mae) or The Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, GSEs), or any agency of the United States Government, such as The Government National Mortgage Association (Ginnie Mae) (collectively Agency RMBS), and other real estate-related securities and financial assets, including Non-Agency RMBS, asset backed securities (ABS), commercial mortgage-backed securities (CMBS) and loans.

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