New Residential Investment Corp. (NYSE: NRZ) and Manhattan Bridge Capital (NASDAQ:LOAN) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, dividends, valuation, profitability, institutional ownership, earnings and analyst recommendations.
Institutional and Insider Ownership
48.1% of New Residential Investment Corp. shares are owned by institutional investors. Comparatively, 11.4% of Manhattan Bridge Capital shares are owned by institutional investors. 4.0% of New Residential Investment Corp. shares are owned by company insiders. Comparatively, 32.3% of Manhattan Bridge Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
New Residential Investment Corp. pays an annual dividend of $2.00 per share and has a dividend yield of 11.6%. Manhattan Bridge Capital pays an annual dividend of $0.41 per share and has a dividend yield of 6.9%. New Residential Investment Corp. pays out 72.2% of its earnings in the form of a dividend. Manhattan Bridge Capital pays out 107.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. New Residential Investment Corp. has raised its dividend for 3 consecutive years. New Residential Investment Corp. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares New Residential Investment Corp. and Manhattan Bridge Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|New Residential Investment Corp.||55.85%||19.02%||3.80%|
|Manhattan Bridge Capital||59.95%||13.39%||8.37%|
Earnings & Valuation
This table compares New Residential Investment Corp. and Manhattan Bridge Capital’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|New Residential Investment Corp.||$1.30 billion||4.06||$851.39 million||$2.77||6.20|
|Manhattan Bridge Capital||$4.21 million||11.35||$3.08 million||$0.38||15.53|
New Residential Investment Corp. has higher revenue and earnings than Manhattan Bridge Capital. New Residential Investment Corp. is trading at a lower price-to-earnings ratio than Manhattan Bridge Capital, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
New Residential Investment Corp. has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, Manhattan Bridge Capital has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500.
This is a breakdown of current ratings and target prices for New Residential Investment Corp. and Manhattan Bridge Capital, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|New Residential Investment Corp.||0||2||5||0||2.71|
|Manhattan Bridge Capital||0||0||1||0||3.00|
New Residential Investment Corp. currently has a consensus price target of $16.83, suggesting a potential downside of 2.02%. Manhattan Bridge Capital has a consensus price target of $7.25, suggesting a potential upside of 22.88%. Given Manhattan Bridge Capital’s stronger consensus rating and higher possible upside, analysts clearly believe Manhattan Bridge Capital is more favorable than New Residential Investment Corp..
New Residential Investment Corp. beats Manhattan Bridge Capital on 10 of the 17 factors compared between the two stocks.
About New Residential Investment Corp.
New Residential Investment Corp. is a real estate investment trust (REIT). The Company focuses on investing in, and managing, investments related to residential real estate. The Company’s segments include investments in excess mortgage servicing rights (Excess MSRs); investments in mortgage servicing rights (MSRs); investments in servicer advances; investments in real estate securities; investments in residential mortgage loans; investments in consumer loans, and corporate. Its portfolio includes mortgage servicing related assets, residential mortgage backed securities (RMBS), residential mortgage loans and other investments. The Company’s servicing related assets include its investments in Excess MSRs, MSRs and servicer advances. The Company invests in agency RMBS and non-agency RMBS. The Company’s other investments consist of consumer loans.
About Manhattan Bridge Capital
Manhattan Bridge Capital, Inc. (MBC) is a real estate finance company that specializes in originating, servicing and managing a portfolio of first mortgage loans. The Company offers short-term, secured, non-banking loans to real estate investors to fund their acquisition, renovation, rehabilitation or improvement of properties located in the New York metropolitan area. Its primary business objective is to grow its loan portfolio while protecting and preserving capital in a manner that provides for risk-adjusted returns to its shareholders over the long term through dividends. It intends to achieve this objective by continuing to selectively originate, fund loans secured by first mortgages on residential real estate held for investment located in the New York metropolitan area, and to manage and service its portfolio in a manner designed to generate risk-adjusted returns across a range of market conditions and economic cycles. Its loan portfolio includes various construction loans.
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