Financial Review: TPG RE Finance Trust (NYSE:TRTX) & Annaly Capital Management (NYSE:NLY)

TPG RE Finance Trust (NYSE:TRTX) and Annaly Capital Management (NYSE:NLY) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, profitability, valuation and risk.

Volatility & Risk

TPG RE Finance Trust has a beta of 1.47, suggesting that its stock price is 47% more volatile than the S&P 500. Comparatively, Annaly Capital Management has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.

Earnings & Valuation

This table compares TPG RE Finance Trust and Annaly Capital Management”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TPG RE Finance Trust	$332.58 million	1.46	$60.32 million	$0.39	16.45
Annaly Capital Management	$5.96 billion	2.33	$2.03 billion	$1.43	12.90

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

Institutional & Insider Ownership

57.1% of TPG RE Finance Trust shares are held by institutional investors. Comparatively, 51.6% of Annaly Capital Management shares are held by institutional investors. 3.0% of TPG RE Finance Trust shares are held by company insiders. Comparatively, 0.2% of Annaly Capital Management shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares TPG RE Finance Trust and Annaly Capital Management’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TPG RE Finance Trust	13.13%	5.21%	1.17%
Annaly Capital Management	15.52%	16.65%	1.72%

Dividends

TPG RE Finance Trust pays an annual dividend of $0.96 per share and has a dividend yield of 15.0%. Annaly Capital Management pays an annual dividend of $3.00 per share and has a dividend yield of 16.3%. TPG RE Finance Trust pays out 246.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Annaly Capital Management pays out 209.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Annaly Capital Management has increased 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.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for TPG RE Finance Trust and Annaly Capital Management, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TPG RE Finance Trust	0	3	4	0	2.57
Annaly Capital Management	0	4	7	1	2.75

TPG RE Finance Trust currently has a consensus price target of $9.33, suggesting a potential upside of 45.49%. Annaly Capital Management has a consensus price target of $21.67, suggesting a potential upside of 17.45%. Given TPG RE Finance Trust’s higher probable upside, equities analysts plainly believe TPG RE Finance Trust is more favorable than Annaly Capital Management.

Summary

Annaly Capital Management beats TPG RE Finance Trust on 13 of the 18 factors compared between the two stocks.

About TPG RE Finance Trust

TPG RE Finance Trust, Inc., a commercial real estate finance company, originates, acquires, and manages commercial mortgage loans and other commercial real estate-related debt instruments in the United States. It invests in commercial mortgage loans; subordinate mortgage interests, mezzanine loans, secured real estate securities, note financing, preferred equity, and miscellaneous debt instruments; and commercial real estate collateralized loan obligations and commercial mortgage-backed securities secured by properties primarily in the multifamily, life science, mixed-use, hospitality, self storage, industrial, and retail real estate sectors. 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. TPG RE Finance Trust, Inc. was incorporated in 2014 and is based in New York, New York.

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.