Analyzing New York Mortgage Trust (NASDAQ:NYMTN) and Dynex Capital (NYSE:DX)

Dynex Capital (NYSE:DX) and New York Mortgage Trust (NASDAQ:NYMTN) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.

Dividends

Dynex Capital pays an annual dividend of $2.04 per share and has a dividend yield of 16.0%. New York Mortgage Trust pays an annual dividend of $2.00 per share and has a dividend yield of 8.3%. 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. 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.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Dynex Capital and New York Mortgage Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dynex Capital	0	2	2	0	2.50
New York Mortgage Trust	0	0	0	0	0.00

Dynex Capital presently has a consensus price target of $14.56, suggesting a potential upside of 14.08%. Given Dynex Capital’s stronger consensus rating and higher probable upside, research analysts clearly believe Dynex Capital is more favorable than New York Mortgage Trust.

Profitability

This table compares Dynex Capital and New York Mortgage 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%
New York Mortgage Trust	N/A	N/A	N/A

Insider & Institutional Ownership

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

Valuation & Earnings

This table compares Dynex Capital and New York Mortgage Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dynex Capital	$533.52 million	5.92	$319.07 million	$2.63	4.85
New York Mortgage Trust	$273.96 million	N/A	N/A	N/A	N/A

Dynex Capital has higher revenue and earnings than New York Mortgage Trust.

Summary

Dynex Capital beats New York Mortgage Trust on 11 of the 12 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 New York Mortgage 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, including business purpose loans; structured multi-family property investments, such as preferred equity in, and mezzanine loans to owners of multi-family properties; non-agency residential mortgage-backed securities (RMBS); agency RMBS; commercial mortgage-backed securities (CMBS); single-family rental properties; and other mortgage, residential housing, and credit-related assets. The company also 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. New York Mortgage Trust, Inc. was incorporated in 2003 and is headquartered in New York, New York.