Anworth Mortgage Asset Corporation (NYSE: ANH) and QTS Realty Trust (NYSE:QTS) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitability, analyst recommendations and institutional ownership.

Dividends

Anworth Mortgage Asset Corporation pays an annual dividend of $0.60 per share and has a dividend yield of 9.9%. QTS Realty Trust pays an annual dividend of $1.56 per share and has a dividend yield of 3.0%. Anworth Mortgage Asset Corporation pays out 95.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. QTS Realty Trust pays out 390.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Anworth Mortgage Asset Corporation has increased its dividend for 2 consecutive years and QTS Realty Trust has increased its dividend for 2 consecutive years. Anworth Mortgage Asset Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Anworth Mortgage Asset Corporation and QTS Realty Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Anworth Mortgage Asset Corporation $83.05 million 7.13 $61.46 million $0.63 9.64
QTS Realty Trust $422.74 million 5.97 $158.07 million $0.40 129.28

QTS Realty Trust has higher revenue and earnings than Anworth Mortgage Asset Corporation. Anworth Mortgage Asset Corporation is trading at a lower price-to-earnings ratio than QTS Realty Trust, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Anworth Mortgage Asset Corporation has a beta of 0.27, suggesting that its share price is 73% less volatile than the S&P 500. Comparatively, QTS Realty Trust has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Anworth Mortgage Asset Corporation and QTS Realty Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Anworth Mortgage Asset Corporation 0 1 0 0 2.00
QTS Realty Trust 0 4 8 0 2.67

Anworth Mortgage Asset Corporation presently has a consensus price target of $6.00, indicating a potential downside of 1.15%. QTS Realty Trust has a consensus price target of $56.92, indicating a potential upside of 10.07%. Given QTS Realty Trust’s stronger consensus rating and higher possible upside, analysts plainly believe QTS Realty Trust is more favorable than Anworth Mortgage Asset Corporation.

Institutional and Insider Ownership

56.2% of Anworth Mortgage Asset Corporation shares are held by institutional investors. 1.9% of Anworth Mortgage Asset Corporation shares are held by company insiders. Comparatively, 17.3% of QTS Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Anworth Mortgage Asset Corporation and QTS Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Anworth Mortgage Asset Corporation 44.13% 8.83% 0.96%
QTS Realty Trust 4.60% 2.04% 0.93%

About Anworth Mortgage Asset Corporation

Anworth Mortgage Asset Corporation is a real estate investment trust (REIT). The Company’s investment objective is to provide risk-adjusted total returns to its stockholders over the long-term primarily through dividends and secondarily through capital appreciation. Its strategy is to invest in residential mortgage-backed securities (MBS) (both Agency MBS and Non-Agency MBS), residential mortgage loans and residential rental properties. Its principal business objective is to generate net income for distribution to its stockholders primarily based upon the spread between the interest income on its mortgage assets and its borrowing costs to finance its acquisition of those assets. The Company finances residential mortgage loans through asset-backed securities, which are issued by the consolidated securitization trusts. The Company is engaged in investing in, financing and managing a portfolio of residential mortgage-backed securities and residential mortgage loans.

About QTS Realty Trust

QTS Realty Trust, Inc. (QTS) is a provider of secure, compliant data center solutions, hybrid cloud and fully managed services. The Company owns, develops and operates carrier-neutral and multi-tenant data centers. Its data centers are facilities that house the network and computer equipment of multiple customers and provide access to a range of communications carriers. The Company has an integrated platform through which it owns and operates its data centers and provides a range of information technology (IT) infrastructure solutions. Its spectrum of core data center products is referred to as 3Cs, which consists of Custom Data Center (C1), Colocation (C2), and Cloud and Managed Services (C3). Its 3C integrated technology platform provides information technology solutions for Web and information technology applications. Its data centers facilities are used by its customers to house, power and cool the networking equipment and computer systems that support their business processes.

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