Invesco Mortgage Capital (NYSE: DEI) and Douglas Emmett (NYSE:DEI) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, dividends, institutional ownership, profitability and earnings.

Profitability

This table compares Invesco Mortgage Capital and Douglas Emmett’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Invesco Mortgage Capital 52.70% 10.89% 1.19%
Douglas Emmett 13.94% 2.96% 1.39%

Volatility and Risk

Invesco Mortgage Capital has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Douglas Emmett has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500.

Earnings and Valuation

This table compares Invesco Mortgage Capital and Douglas Emmett’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Invesco Mortgage Capital $594.39 million 3.04 $348.60 million N/A N/A
Douglas Emmett $812.05 million 8.22 $94.44 million $1.90 20.66

Invesco Mortgage Capital has higher earnings, but lower revenue than Douglas Emmett.

Analyst Ratings

This is a breakdown of current recommendations for Invesco Mortgage Capital and Douglas Emmett, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Invesco Mortgage Capital 0 3 0 0 2.00
Douglas Emmett 1 6 4 0 2.27

Invesco Mortgage Capital presently has a consensus target price of $16.67, suggesting a potential upside of 2.88%. Douglas Emmett has a consensus target price of $41.44, suggesting a potential upside of 5.56%. Given Douglas Emmett’s stronger consensus rating and higher possible upside, analysts clearly believe Douglas Emmett is more favorable than Invesco Mortgage Capital.

Institutional & Insider Ownership

66.9% of Invesco Mortgage Capital shares are held by institutional investors. Comparatively, 95.3% of Douglas Emmett shares are held by institutional investors. 0.3% of Invesco Mortgage Capital shares are held by company insiders. Comparatively, 16.2% of Douglas Emmett shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Invesco Mortgage Capital pays an annual dividend of $1.68 per share and has a dividend yield of 10.4%. Douglas Emmett pays an annual dividend of $1.00 per share and has a dividend yield of 2.5%. Douglas Emmett pays out 52.6% of its earnings in the form of a dividend. Douglas Emmett has increased its dividend for 7 consecutive years.

Summary

Douglas Emmett beats Invesco Mortgage Capital on 10 of the 15 factors compared between the two stocks.

About Invesco Mortgage Capital

Invesco Mortgage Capital, Inc. engages in investing, financing and managing residential and commercial mortgage-backed securities and mortgage loans. The firm primarily invests in the following: Residential mortgage-backed securities (RMBS), Commercial mortgage-backed securities, RMBS that are not guaranteed by a U.S. government agency, Credit risk transfer securities that are unsecured obligations issued by government-sponsored enterprises, Residential and commercial mortgage loans and Other real estate-related financing arrangements. Invesco Mortgage Capital was founded on June 5, 2008 and is headquartered in Atlanta, GA.

About Douglas Emmett

Douglas Emmett, Inc. (DEI) is a fully integrated, self-administered and self-managed real estate investment trust (REIT), and one of the largest owners and operators of high-quality office and multifamily properties located in the premier coastal submarkets of Los Angeles and Honolulu. Douglas Emmett focuses on owning and acquiring a substantial share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities. For more information about Douglas Emmett, please visit our website at www.douglasemmett.com.

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