Head to Head Review: Starwood Property Trust (STWD) vs. Five Oaks Investment Corp. (OAKS)
Starwood Property Trust (NYSE: STWD) and Five Oaks Investment Corp. (NYSE:OAKS) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, profitability, dividends, risk and institutional ownership.
Insider and Institutional Ownership
68.6% of Starwood Property Trust shares are held by institutional investors. Comparatively, 33.7% of Five Oaks Investment Corp. shares are held by institutional investors. 2.4% of Starwood Property Trust shares are held by insiders. Comparatively, 0.9% of Five Oaks Investment Corp. shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares Starwood Property Trust and Five Oaks Investment Corp.’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Starwood Property Trust||$546.16 million||10.35||$456.67 million||$1.76||12.38|
|Five Oaks Investment Corp.||$26.49 million||3.82||$14.83 million||$0.67||6.82|
Starwood Property Trust has higher revenue and earnings than Five Oaks Investment Corp.. Five Oaks Investment Corp. is trading at a lower price-to-earnings ratio than Starwood Property Trust, indicating that it is currently the more affordable of the two stocks.
Starwood Property Trust pays an annual dividend of $1.92 per share and has a dividend yield of 8.8%. Five Oaks Investment Corp. pays an annual dividend of $0.60 per share and has a dividend yield of 13.1%. Starwood Property Trust pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Five Oaks Investment Corp. pays out 89.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Five Oaks Investment Corp. is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility & Risk
Starwood Property Trust has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500. Comparatively, Five Oaks Investment Corp. has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500.
This is a breakdown of recent recommendations for Starwood Property Trust and Five Oaks Investment Corp., as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Starwood Property Trust||0||1||1||0||2.50|
|Five Oaks Investment Corp.||0||1||0||0||2.00|
Starwood Property Trust presently has a consensus target price of $24.00, indicating a potential upside of 10.14%. Given Starwood Property Trust’s stronger consensus rating and higher possible upside, research analysts clearly believe Starwood Property Trust is more favorable than Five Oaks Investment Corp..
This table compares Starwood Property Trust and Five Oaks Investment Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Starwood Property Trust||55.89%||11.39%||0.69%|
|Five Oaks Investment Corp.||12.65%||10.48%||0.48%|
Starwood Property Trust beats Five Oaks Investment Corp. on 13 of the 16 factors compared between the two stocks.
About Starwood Property Trust
Starwood Property Trust, Inc. is a real estate investment trust. The Company operates through three business segments: Real estate lending (the Lending Segment), which engages primarily in originating, acquiring, financing and managing commercial first mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), residential mortgage-backed securities, and other real estate and real estate-related debt investments; Real estate investing and servicing (the Investing and Servicing Segment), which includes a servicing business in the United States that manages and works out problem assets; an investment business that selectively acquires and manages unrated, investment grade and non-investment grade rated CMBS, and a mortgage loan business, and Real estate property (the Property Segment), which engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties.
About Five Oaks Investment Corp.
Five Oaks Investment Corp. is a real estate investment trust. The Company is focused on investing on a leveraged basis in mortgage and other real estate-related assets, particularly residential mortgage loans and mortgage-backed securities (MBS). The Company invests in various assets, such as Agency residential MBS (RMBS); securitizations backed by multi-family mortgage loans, or Multi-Family MBS; residential mortgage loans and other mortgage-related investments, including mortgage servicing rights (MSRs), and Non-Agency RMBS. The Company finances its investments in Agency RMBS, Multi-Family MBS, residential mortgage loans and Non-Agency RMBS primarily through short-term borrowings structured as repurchase agreements. The Company is externally managed and advised by Oak Circle Capital Partners LLC.
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