American Capital Mortgage Investment Corp. (NASDAQ: MTGE) and AG Mortgage Investment Trust (NYSE:MITT) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Dividends

American Capital Mortgage Investment Corp. pays an annual dividend of $1.80 per share and has a dividend yield of 9.2%. AG Mortgage Investment Trust pays an annual dividend of $1.90 per share and has a dividend yield of 9.8%. American Capital Mortgage Investment Corp. 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. AG Mortgage Investment Trust pays out 58.8% of its earnings in the form of a dividend. AG Mortgage Investment Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

American Capital Mortgage Investment Corp. has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500. Comparatively, AG Mortgage Investment Trust has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Valuation & Earnings

This table compares American Capital Mortgage Investment Corp. and AG Mortgage Investment Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Capital Mortgage Investment Corp. $158.84 million 5.64 $101.67 million $2.22 8.81
AG Mortgage Investment Trust $119.69 million 4.50 $89.88 million $3.23 6.00

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for American Capital Mortgage Investment Corp. and AG Mortgage Investment Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Capital Mortgage Investment Corp. 0 1 3 0 2.75
AG Mortgage Investment Trust 0 3 0 0 2.00

American Capital Mortgage Investment Corp. currently has a consensus target price of $20.00, suggesting a potential upside of 2.30%. AG Mortgage Investment Trust has a consensus target price of $18.17, suggesting a potential downside of 6.21%. Given American Capital Mortgage Investment Corp.’s stronger consensus rating and higher probable upside, analysts plainly believe American Capital Mortgage Investment Corp. is more favorable than AG Mortgage Investment Trust.

Profitability

This table compares American Capital Mortgage Investment Corp. and AG Mortgage Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Capital Mortgage Investment Corp. 104.38% 10.40% 1.77%
AG Mortgage Investment Trust 85.21% 11.97% 2.12%

Institutional & Insider Ownership

73.9% of American Capital Mortgage Investment Corp. shares are owned by institutional investors. Comparatively, 64.7% of AG Mortgage Investment Trust shares are owned by institutional investors. 1.1% of American Capital Mortgage Investment Corp. shares are owned by insiders. Comparatively, 1.6% of AG Mortgage Investment Trust shares are owned 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.

Summary

American Capital Mortgage Investment Corp. beats AG Mortgage Investment Trust on 9 of the 16 factors compared between the two stocks.

American Capital Mortgage Investment Corp. Company Profile

MTGE Investment Corp., formerly American Capital Mortgage Investment Corp., is a real estate investment trust. The Company invests in, finances and manages a leveraged portfolio of real estate-related investments, which include agency residential mortgage-backed securities (RMBS), non-agency securities, other mortgage-related investments and other real estate investments. Agency RMBS includes residential mortgage pass-through certificates and collateralized mortgage obligations (CMOs) structured from residential mortgage pass-through certificates for which the principal and interest payments are guaranteed by a government-sponsored enterprise (GSE), or by a United States Government agency, such as Government National Mortgage Association (Ginnie Mae). Non-agency securities include securities backed by residential mortgages that are not guaranteed by a GSE or the United States Government agency, and credit risk transfer securities (CRT). The Company’s manager is MTGE Management, LLC.

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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