Comparing ARMOUR Residential REIT (NYSE:ARR) and Manhattan Bridge Capital (NASDAQ:LOAN)

Manhattan Bridge Capital (NASDAQ:LOAN) and ARMOUR Residential REIT (NYSE:ARR) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, risk, dividends, institutional ownership and profitability.

Analyst Ratings

This is a summary of recent ratings for Manhattan Bridge Capital and ARMOUR Residential REIT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Manhattan Bridge Capital	0	1	0	0	2.00
ARMOUR Residential REIT	0	3	2	0	2.40

ARMOUR Residential REIT has a consensus price target of $18.50, suggesting a potential upside of 12.77%. Given ARMOUR Residential REIT’s stronger consensus rating and higher possible upside, analysts plainly believe ARMOUR Residential REIT is more favorable than Manhattan Bridge Capital.

Valuation and Earnings

This table compares Manhattan Bridge Capital and ARMOUR Residential REIT”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Manhattan Bridge Capital	$8.67 million	5.42	$5.11 million	$0.42	9.79
ARMOUR Residential REIT	$800.42 million	2.90	$322.69 million	$3.72	4.41

ARMOUR Residential REIT has higher revenue and earnings than Manhattan Bridge Capital. ARMOUR Residential REIT 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.

Dividends

Manhattan Bridge Capital pays an annual dividend of $0.44 per share and has a dividend yield of 10.7%. ARMOUR Residential REIT pays an annual dividend of $2.88 per share and has a dividend yield of 17.6%. Manhattan Bridge Capital pays out 104.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ARMOUR Residential REIT pays out 77.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Manhattan Bridge Capital has increased its dividend for 1 consecutive years. ARMOUR Residential REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

21.8% of Manhattan Bridge Capital shares are owned by institutional investors. Comparatively, 54.2% of ARMOUR Residential REIT shares are owned by institutional investors. 24.6% of Manhattan Bridge Capital shares are owned by insiders. Comparatively, 0.2% of ARMOUR Residential REIT shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Manhattan Bridge Capital has a beta of 0.16, indicating that its stock price is 84% less volatile than the S&P 500. Comparatively, ARMOUR Residential REIT has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500.

Profitability

This table compares Manhattan Bridge Capital and ARMOUR Residential REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Manhattan Bridge Capital	58.30%	11.02%	7.59%
ARMOUR Residential REIT	44.90%	15.10%	1.66%

Summary

ARMOUR Residential REIT beats Manhattan Bridge Capital on 11 of the 17 factors compared between the two stocks.

About Manhattan Bridge Capital

Manhattan Bridge Capital, Inc., a real estate finance company, originates, services, and manages a portfolio of first mortgage loans in the United States. The company offers short-term, secured, and non-banking loans to real estate investors to fund acquisition, renovation, rehabilitation, or development of residential or commercial properties. Its loans are secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was founded in 1989 and is headquartered in Great Neck, New York.

About ARMOUR Residential REIT

ARMOUR Residential REIT, Inc. invests in residential mortgage-backed securities (MBS) in the United States. Its securities portfolio primarily consists of the United States Government-sponsored entity's (GSE) and the Government National Mortgage Administration's issued or guaranteed securities backed by fixed rate, hybrid adjustable rate, and adjustable-rate home loans; and unsecured notes and bonds issued by the GSE and the United States treasuries, as well as money market instruments. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. ARMOUR Residential REIT, Inc. was incorporated in 2008 and is based in Vero Beach, Florida.