Dynex Capital (NYSE:DX) versus Adamas Trust (NASDAQ:ADAM) Head-To-Head Analysis

Adamas Trust (NASDAQ:ADAM) and Dynex Capital (NYSE:DX) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Adamas Trust and Dynex Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adamas Trust	0	3	1	1	2.60
Dynex Capital	0	2	2	0	2.50

Adamas Trust presently has a consensus price target of $9.50, suggesting a potential downside of 6.50%. Dynex Capital has a consensus price target of $14.56, suggesting a potential upside of 11.93%. Given Dynex Capital’s higher probable upside, analysts clearly believe Dynex Capital is more favorable than Adamas Trust.

Dividends

Adamas Trust pays an annual dividend of $1.08 per share and has a dividend yield of 10.6%. Dynex Capital pays an annual dividend of $2.04 per share and has a dividend yield of 15.7%. Adamas Trust pays out 64.3% of its earnings in the form of a dividend. Dynex Capital pays out 77.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dynex Capital has raised its dividend for 5 consecutive years. Dynex Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Adamas Trust has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500. Comparatively, Dynex Capital has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500.

Profitability

This table compares Adamas Trust and Dynex Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Adamas Trust	29.82%	14.72%	1.04%
Dynex Capital	49.18%	8.85%	1.06%

Institutional and Insider Ownership

54.9% of Adamas Trust shares are owned by institutional investors. Comparatively, 38.3% of Dynex Capital shares are owned by institutional investors. 2.0% of Adamas Trust shares are owned by insiders. Comparatively, 0.8% of Dynex Capital shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Adamas Trust and Dynex Capital”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adamas Trust	$407.04 million	2.24	$149.05 million	$1.68	6.05
Dynex Capital	$533.52 million	6.03	$319.07 million	$2.63	4.95

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

Summary

Dynex Capital beats Adamas Trust on 10 of the 18 factors compared between the two stocks.

About Adamas Trust

New York Mortgage Trust, Inc. acquires, invests in, finances, and manages mortgage-related single-family and multi-family residential assets in the United States. Its targeted investments include residential loans, second mortgages, and business purpose loans; structured multi-family property investments, such as preferred equity in, and mezzanine loans to owners of multi-family properties, as well as joint venture equity investments in multi-family properties; non-agency residential mortgage-backed securities (RMBS); agency RMBS; commercial mortgage-backed securities (CMBS); and other mortgage, residential housing, and credit-related assets. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was incorporated in 2003 and is headquartered in New York, New York.

About Dynex Capital

Dynex Capital, Inc., a mortgage real estate investment trust, invests in mortgage-backed securities (MBS) on a leveraged basis in the United States. It invests in agency and non-agency MBS consisting of residential MBS, commercial MBS (CMBS), and CMBS interest-only securities. Agency MBS have a guaranty of principal payment by an agency of the U.S. government or a U.S. government-sponsored entity, such as Fannie Mae and Freddie Mac. Non-Agency MBS have no such guaranty of payment. The company has qualified as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders as dividends. Dynex Capital, Inc. was incorporated in 1987 and is headquartered in Glen Allen, Virginia.