Head-To-Head Survey: MFA Financial (NYSE:MFA) vs. Arbor Realty Trust (NYSE:ABR)

MFA Financial (NYSE:MFA – Get Free Report) and Arbor Realty Trust (NYSE:ABR – Get Free Report) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, valuation, dividends and profitability.

Dividends

MFA Financial pays an annual dividend of $1.44 per share and has a dividend yield of 14.7%. Arbor Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 14.9%. MFA Financial pays out 169.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Arbor Realty Trust pays out 150.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MFA Financial has increased its dividend for 1 consecutive years. Arbor Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

MFA Financial has a beta of 1.61, meaning that its share price is 61% more volatile than the S&P 500. Comparatively, Arbor Realty Trust has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.

Profitability

This table compares MFA Financial and Arbor Realty Trust’s net margins, return on equity and return on assets.

Valuation and Earnings

This table compares MFA Financial and Arbor Realty Trust”s gross revenue, earnings per share (EPS) and valuation.

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

Analyst Ratings

This is a summary of current ratings for MFA Financial and Arbor Realty Trust, as reported by MarketBeat.com.

MFA Financial currently has a consensus price target of $11.05, indicating a potential upside of 12.64%. Arbor Realty Trust has a consensus price target of $10.13, indicating a potential upside of 25.62%. Given Arbor Realty Trust’s higher probable upside, analysts clearly believe Arbor Realty Trust is more favorable than MFA Financial.

Institutional and Insider Ownership

65.3% of MFA Financial shares are held by institutional investors. Comparatively, 57.3% of Arbor Realty Trust shares are held by institutional investors. 0.8% of MFA Financial shares are held by insiders. Comparatively, 3.8% of Arbor Realty Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Arbor Realty Trust beats MFA Financial on 9 of the 17 factors compared between the two stocks.

About MFA Financial

(Get Free Report)

MFA Financial, Inc., together with its subsidiaries, operates as a real estate investment trust in the United States. It invests in residential mortgage securities, including non-agency mortgage-backed securities, agency MBS, and credit risk transfer securities; residential whole loans, including purchased performing loans, purchased credit deteriorated, and non-performing loans; and mortgage servicing rights related assets. The company was incorporated in 1997 and is based in New York, New York.

About Arbor Realty Trust

(Get Free Report)

Arbor Realty Trust, Inc. invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States. The company operates through Structured Business and Agency Business segments. It primarily invests in bridge and mezzanine loans, including junior participating interests in first mortgages, and preferred and direct equity, as well as real estate-related joint ventures, real estate-related notes, and various mortgage-related securities. In addition, the company offers bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property; financing by making preferred equity investments in entities that directly or indirectly own real property; mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction; junior participation financing in the form of a junior participating interest in the senior debt; and financing products to borrowers who are looking to acquire conventional, workforce, and affordable single-family housing. Further, it underwrites, originates, sells, and services multifamily mortgage loans through conduit/commercial mortgage-backed securities programs. 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. Arbor Realty Trust, Inc. was incorporated in 2003 and is headquartered in Uniondale, New York.