ARMOUR Residential REIT (NYSE:ARR) and Safestore (OTCMKTS:SFSHF) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

Analyst Ratings

This is a breakdown of recent ratings and target prices for ARMOUR Residential REIT and Safestore, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ARMOUR Residential REIT 1 3 1 0 2.00
Safestore 0 3 1 0 2.25

ARMOUR Residential REIT presently has a consensus price target of $13.50, indicating a potential upside of 43.77%. Given ARMOUR Residential REIT’s higher possible upside, equities analysts plainly believe ARMOUR Residential REIT is more favorable than Safestore.

Risk and Volatility

ARMOUR Residential REIT has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500. Comparatively, Safestore has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
ARMOUR Residential REIT -154.29% 11.20% 1.20%
Safestore N/A N/A N/A

Earnings and Valuation

This table compares ARMOUR Residential REIT and Safestore’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ARMOUR Residential REIT $439.57 million 1.38 -$249.90 million $2.27 4.14
Safestore N/A N/A N/A N/A N/A

Safestore has lower revenue, but higher earnings than ARMOUR Residential REIT.

Insider and Institutional Ownership

52.7% of ARMOUR Residential REIT shares are held by institutional investors. 1.3% of ARMOUR Residential REIT shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

ARMOUR Residential REIT beats Safestore on 6 of the 9 factors compared between the two stocks.

About ARMOUR Residential REIT

ARMOUR Residential REIT, Inc. invests in residential mortgage backed securities in the United States. The company is managed by ARMOUR Capital Management LP. 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, as well as unsecured notes and bonds issued by the GSE and the United States treasuries; and money market instruments. The company also invests in other securities backed by residential mortgages for which the payment of principal and interest is not guaranteed by a GSE or government agency. ARMOUR Residential REIT, Inc. has elected to be taxed as a real estate investment trust under the Internal Revenue Code. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was founded in 2008 and is based in Vero Beach, Florida.

About Safestore

UK's largest self storage group with 146 stores Safestore has 119 self storage centres in the UK including two business centres and a further 27 stores in the Paris region. Safestore was founded in the UK in 1998. It acquired the French business “Une Pièce en Plus” in 2004 which was founded in 1998 by the current Safestore Group CEO Frederic Vecchioli.

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