Analyzing Perella Weinberg Partners (NASDAQ:PWP) & Orchid Island Capital (NYSE:ORC)

Orchid Island Capital (NYSE:ORC) and Perella Weinberg Partners (NASDAQ:PWP) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.

Volatility & Risk

Orchid Island Capital has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500. Comparatively, Perella Weinberg Partners has a beta of 1.63, meaning that its share price is 63% more volatile than the S&P 500.

Valuation & Earnings

This table compares Orchid Island Capital and Perella Weinberg Partners”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orchid Island Capital	$414.00 million	2.35	$159.03 million	$1.48	3.29
Perella Weinberg Partners	$689.25 million	1.70	$35.48 million	$0.26	47.96

Orchid Island Capital has higher earnings, but lower revenue than Perella Weinberg Partners. Orchid Island Capital is trading at a lower price-to-earnings ratio than Perella Weinberg Partners, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

32.7% of Orchid Island Capital shares are held by institutional investors. Comparatively, 41.1% of Perella Weinberg Partners shares are held by institutional investors. 0.3% of Orchid Island Capital shares are held by insiders. Comparatively, 26.1% of Perella Weinberg Partners shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Orchid Island Capital and Perella Weinberg Partners, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orchid Island Capital	1	2	0	0	1.67
Perella Weinberg Partners	1	1	2	0	2.25

Orchid Island Capital currently has a consensus target price of $7.50, indicating a potential upside of 54.16%. Perella Weinberg Partners has a consensus target price of $22.00, indicating a potential upside of 76.42%. Given Perella Weinberg Partners’ stronger consensus rating and higher probable upside, analysts plainly believe Perella Weinberg Partners is more favorable than Orchid Island Capital.

Dividends

Orchid Island Capital pays an annual dividend of $1.20 per share and has a dividend yield of 24.7%. Perella Weinberg Partners pays an annual dividend of $0.28 per share and has a dividend yield of 2.2%. Orchid Island Capital pays out 81.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Perella Weinberg Partners pays out 107.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Orchid Island Capital has increased its dividend for 1 consecutive years. Orchid Island Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Orchid Island Capital and Perella Weinberg Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orchid Island Capital	N/A	11.87%	1.35%
Perella Weinberg Partners	3.19%	-35.84%	8.40%

Summary

Perella Weinberg Partners beats Orchid Island Capital on 10 of the 17 factors compared between the two stocks.

About Orchid Island Capital

Orchid Island Capital, Inc., a specialty finance company, invests in residential mortgage-backed securities (RMBS) in the United States. The company’s RMBS is backed by single-family residential mortgage loans, referred as Agency RMBS. Its portfolio includes traditional pass-through Agency RMBS, such as mortgage pass through certificates and collateralized mortgage obligations; and structured Agency RMBS comprising interest only securities, inverse interest only securities, and principal only securities. The company has elected to be taxed as a real estate investment trust (REIT) for the United States federal income tax purposes. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to stockholders, if it annually distributes dividends equal to at least 90% of its REIT taxable income to its stockholders. Orchid Island Capital, Inc. was incorporated in 2010 and is headquartered in Vero Beach, Florida.

About Perella Weinberg Partners

Perella Weinberg Partners, an independent investment banking company, provides strategic and financial advice services in the United States and internationally. The company offers advisory services related to strategic and financial decisions, mergers and acquisition execution, shareholder and defense advisory, and financing and capital solutions advice with resources focused on restructuring, liability management, and capital markets advisory, as well as underwriting and research services primarily for the energy and related industries. It serves public multinational corporations, mid-sized public and private companies, financial sponsors, individual entrepreneurs, private and institutional investors, creditor committees, and government institutions in consumer and retail; energy and energy transition; financial services and FinTech; healthcare; industrials and infrastructure; and technology, telecommunication, and media industries. Perella Weinberg Partners is headquartered in New York, New York.