Head to Head Analysis: BrightSpire Capital (NYSE:BRSP) vs. Annaly Capital Management (NYSE:NLY)

Annaly Capital Management (NYSE:NLY) and BrightSpire Capital (NYSE:BRSP) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Valuation and Earnings

This table compares Annaly Capital Management and BrightSpire Capital”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Annaly Capital Management	$5.96 billion	2.77	$2.03 billion	$2.96	7.62
BrightSpire Capital	$194.89 million	3.63	-$31.15 million	($0.27)	-20.09

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

Volatility & Risk

Annaly Capital Management has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, BrightSpire Capital has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500.

Profitability

This table compares Annaly Capital Management and BrightSpire Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Annaly Capital Management	34.33%	15.92%	1.68%
BrightSpire Capital	-24.16%	7.46%	2.03%

Analyst Ratings

This is a summary of current recommendations and price targets for Annaly Capital Management and BrightSpire Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Annaly Capital Management	0	4	7	1	2.75
BrightSpire Capital	2	0	4	0	2.33

Annaly Capital Management presently has a consensus target price of $24.44, suggesting a potential upside of 8.42%. BrightSpire Capital has a consensus target price of $6.75, suggesting a potential upside of 24.42%. Given BrightSpire Capital’s higher possible upside, analysts clearly believe BrightSpire Capital is more favorable than Annaly Capital Management.

Institutional & Insider Ownership

51.6% of Annaly Capital Management shares are held by institutional investors. Comparatively, 56.6% of BrightSpire Capital shares are held by institutional investors. 0.2% of Annaly Capital Management shares are held by company insiders. Comparatively, 2.8% of BrightSpire Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Annaly Capital Management pays an annual dividend of $3.00 per share and has a dividend yield of 13.3%. BrightSpire Capital pays an annual dividend of $0.64 per share and has a dividend yield of 11.8%. Annaly Capital Management pays out 101.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BrightSpire Capital pays out -237.0% of its earnings in the form of a dividend. Annaly Capital Management has raised its dividend for 2 consecutive years. Annaly Capital Management is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Annaly Capital Management beats BrightSpire Capital on 11 of the 18 factors compared between the two stocks.

About Annaly Capital Management

Annaly Capital Management, Inc., a diversified capital manager, engages in mortgage finance. The company invests in agency mortgage-backed securities collateralized by residential mortgages; non-agency residential whole loans and securitized products within the residential and commercial markets; mortgage servicing rights; agency commercial mortgage-backed securities; to-be-announced forward contracts; residential mortgage loans; and agency or private label credit risk transfer securities. It has elected to be taxed as a real estate investment trust (REIT). As a REIT, it is not subject to federal income tax to the extent that it distributes its taxable income to its shareholders. The company was incorporated in 1996 and is based in New York, New York.

About BrightSpire Capital

BrightSpire Capital, Inc. operates as a commercial real estate (CRE) credit real estate investment trust in the United States and Europe. The company operates through Senior and Mezzanine Loans and Preferred Equity; Net Leased and Other Real Estate; and Corporate and Other segments. It focuses on originating, acquiring, financing, and managing a diversified portfolio of CRE debt investments consisting of first mortgage loans, senior loans, debt securities, mezzanine loans, and preferred equity investments, as well as net leased properties. 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 formerly known as Colony Credit Real Estate, Inc. and changed its name to BrightSpire Capital, Inc. in June 2021. BrightSpire Capital, Inc. was incorporated in 2017 and is headquartered in New York, New York.