Hatteras Financial Corp. (NYSE: HTS) is one of 38 public companies in the “Mortgage REITs” industry, but how does it compare to its peers? We will compare Hatteras Financial Corp. to related companies based off the strength of its earnings, valuation, dividends, institutional ownership, profitability, risk and analyst recommendations.

Valuation and Earnings

This table compares Hatteras Financial Corp. and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Hatteras Financial Corp. N/A N/A 52.55
Hatteras Financial Corp. Competitors $320.94 million $123.24 million 1.69

Hatteras Financial Corp.’s peers have higher revenue and earnings than Hatteras Financial Corp.. Hatteras Financial Corp. is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently the more expensive than other companies in its industry.

Dividends

Hatteras Financial Corp. pays an annual dividend of $1.80 per share and has a dividend yield of 11.0%. Hatteras Financial Corp. pays out 580.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Mortgage REITs” companies pay a dividend yield of 10.2% and pay out 80.6% of their earnings in the form of a dividend.

Profitability

This table compares Hatteras Financial Corp. and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hatteras Financial Corp. N/A -16.93% -1.89%
Hatteras Financial Corp. Competitors 45.52% 10.12% 2.71%

Institutional and Insider Ownership

58.1% of shares of all “Mortgage REITs” companies are owned by institutional investors. 3.3% of shares of all “Mortgage REITs” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for Hatteras Financial Corp. and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hatteras Financial Corp. 0 0 0 0 N/A
Hatteras Financial Corp. Competitors 197 1024 911 41 2.37

All “Mortgage REITs” companies have a potential upside of 3.19%. Given Hatteras Financial Corp.’s peers higher possible upside, analysts clearly believe Hatteras Financial Corp. has less favorable growth aspects than its peers.

Risk & Volatility

Hatteras Financial Corp. has a beta of 0.3, suggesting that its share price is 70% less volatile than the S&P 500. Comparatively, Hatteras Financial Corp.’s peers have a beta of 0.72, suggesting that their average share price is 28% less volatile than the S&P 500.

Summary

Hatteras Financial Corp. peers beat Hatteras Financial Corp. on 9 of the 10 factors compared.

About Hatteras Financial Corp.

Hatteras Financial Corp. is an externally managed mortgage real estate investment trust (REIT) that invests in single-family residential mortgage real estate assets, such as mortgage-backed security (MBS), mortgage servicing right (MSR), residential mortgage loans and other financial assets. MBS are pass-through securities consisting of a pool of mortgage loans. Its primary business is owning and managing agency securities, with a primary focus on adjustable-rate mortgage securities. Its primary investment assets include Agency MBS; other agency issued securities, such as credit-risk transfer bonds; MSR; non-agency securities; residential mortgage loans, and other real estate related assets as permitted by its investment guidelines and REIT requirements. Its business operations consist of the Hatteras Financial Corp., Onslow Bay Financial LLC, First Winston Securities, Inc. and Wind River TRS LLC. It is externally managed and advised by its manager, Atlantic Capital Advisors LLC.

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