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

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

Risk and Volatility

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

Profitability

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

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

Institutional & Insider Ownership

38.3% of Dynex Capital shares are owned by institutional investors. Comparatively, 54.9% of Adamas Trust shares are owned by institutional investors. 0.8% of Dynex Capital shares are owned by company insiders. Comparatively, 2.0% of Adamas Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Dynex Capital and Adamas Trust”s gross revenue, earnings per share and valuation.

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

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.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Dynex Capital and Adamas Trust, as provided by MarketBeat.

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

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

Dividends

Dynex Capital pays an annual dividend of $2.04 per share and has a dividend yield of 15.7%. Adamas Trust pays an annual dividend of $1.08 per share and has a dividend yield of 10.6%. 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. Adamas Trust pays out 64.3% of its earnings in the form of a dividend. 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.

Summary

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

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.

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.