New Residential Investment (NYSE:NRZ) and EPR Properties (NYSE:EPR) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, dividends, profitability, earnings and valuation.

Volatility and Risk

New Residential Investment has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, EPR Properties has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500.

Earnings & Valuation

This table compares New Residential Investment and EPR Properties’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New Residential Investment $1.66 billion 4.18 $963.96 million $2.38 7.04
EPR Properties $700.73 million 8.22 $266.98 million $6.10 12.61

New Residential Investment has higher revenue and earnings than EPR Properties. New Residential Investment is trading at a lower price-to-earnings ratio than EPR Properties, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares New Residential Investment and EPR Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Residential Investment 57.58% 13.88% 3.05%
EPR Properties 38.10% 9.27% 4.34%

Analyst Ratings

This is a summary of recent ratings and target prices for New Residential Investment and EPR Properties, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Residential Investment 0 0 4 0 3.00
EPR Properties 0 4 2 0 2.33

New Residential Investment presently has a consensus price target of $19.38, indicating a potential upside of 15.67%. EPR Properties has a consensus price target of $72.10, indicating a potential downside of 6.25%. Given New Residential Investment’s stronger consensus rating and higher probable upside, equities analysts clearly believe New Residential Investment is more favorable than EPR Properties.

Dividends

New Residential Investment pays an annual dividend of $2.00 per share and has a dividend yield of 11.9%. EPR Properties pays an annual dividend of $4.50 per share and has a dividend yield of 5.9%. New Residential Investment pays out 84.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EPR Properties pays out 73.8% of its earnings in the form of a dividend. New Residential Investment has raised its dividend for 5 consecutive years and EPR Properties has raised its dividend for 8 consecutive years.

Institutional and Insider Ownership

49.1% of New Residential Investment shares are owned by institutional investors. Comparatively, 84.7% of EPR Properties shares are owned by institutional investors. 0.9% of New Residential Investment shares are owned by insiders. Comparatively, 1.4% of EPR Properties shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

New Residential Investment beats EPR Properties on 9 of the 17 factors compared between the two stocks.

About New Residential Investment

New Residential Investment Corp., a real estate investment trust, focuses on investing in and managing residential mortgage related assets in the United States. It operates through Servicing and Originations, Residential Securities and Loans, and Consumer Loans segments. The company invests in excess mortgage servicing rights (MSRs) on residential mortgage loans; and in servicer advances, including the basic fee component of the related MSRs. It also invests in real estate securities and residential mortgage loans, as well as in consumer loans, including unsecured and homeowner loans. 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. The company was founded in 2011 and is based in New York, New York.

About EPR Properties

EPR Properties is a specialty real estate investment trust (REIT) that invests in properties in select market segments which require unique industry knowledge, while offering the potential for stable and attractive returns. Our total investments exceed $6.7 billion and our primary investment segments are Entertainment, Recreation and Education. We adhere to rigorous underwriting and investing criteria centered on key industry and property level cash flow standards. We believe our focused niche approach provides a competitive advantage, and the potential for higher growth and better yields.

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