Head to Head Comparison: Angel Oak Mortgage REIT (NYSE:AOMR) versus Rithm Capital (NYSE:RITM)

Angel Oak Mortgage REIT (NYSE:AOMR) and Rithm Capital (NYSE:RITM) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, dividends and valuation.

Dividends

Angel Oak Mortgage REIT pays an annual dividend of $1.28 per share and has a dividend yield of 15.8%. Rithm Capital pays an annual dividend of $1.00 per share and has a dividend yield of 10.4%. Angel Oak Mortgage REIT pays out 170.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rithm Capital pays out 166.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Angel Oak Mortgage REIT and Rithm Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Angel Oak Mortgage REIT	0	3	3	0	2.50
Rithm Capital	0	1	10	0	2.91

Angel Oak Mortgage REIT currently has a consensus price target of $10.06, suggesting a potential upside of 24.12%. Rithm Capital has a consensus price target of $13.15, suggesting a potential upside of 36.14%. Given Rithm Capital’s stronger consensus rating and higher probable upside, analysts clearly believe Rithm Capital is more favorable than Angel Oak Mortgage REIT.

Profitability

This table compares Angel Oak Mortgage REIT and Rithm Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Angel Oak Mortgage REIT	11.85%	7.74%	0.71%
Rithm Capital	9.20%	19.86%	2.84%

Valuation and Earnings

This table compares Angel Oak Mortgage REIT and Rithm Capital”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Angel Oak Mortgage REIT	$143.65 million	1.31	$44.02 million	$0.75	10.81
Rithm Capital	$4.59 billion	1.18	$681.45 million	$0.60	16.10

Rithm Capital has higher revenue and earnings than Angel Oak Mortgage REIT. Angel Oak Mortgage REIT is trading at a lower price-to-earnings ratio than Rithm Capital, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

80.2% of Angel Oak Mortgage REIT shares are owned by institutional investors. Comparatively, 44.9% of Rithm Capital shares are owned by institutional investors. 2.9% of Angel Oak Mortgage REIT shares are owned by company insiders. Comparatively, 0.6% of Rithm Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Angel Oak Mortgage REIT has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500. Comparatively, Rithm Capital has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Summary

Rithm Capital beats Angel Oak Mortgage REIT on 9 of the 16 factors compared between the two stocks.

About Angel Oak Mortgage REIT

Angel Oak Mortgage REIT, Inc., a real estate finance company, focuses on acquiring and investing in first lien non- qualified mortgage loans and other mortgage-related assets in the United States mortgage market. It offers investment securities; residential mortgage loans; and commercial mortgage 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 incorporated in 2018 and is headquartered in Atlanta, Georgia.

About Rithm Capital

Rithm Capital Corp. operates as an asset manager focused on real estate, credit, and financial services. It operates through Origination and Servicing, Investment Portfolio, Mortgage Loans Receivable, and Asset Management segments. Its investment portfolio primarily comprises of mortgage servicing rights (MSR), and MSR financing receivables, title, appraisal and property preservation, excess MSRs, and services advance investments; real estate securities, call rights, SFR properties, and residential mortgage loans; consumer and business purpose loans; and asset management related investments. 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 formerly known as New Residential Investment Corp. and changed its name to Rithm Capital Corp. in August 2022. Rithm Capital Corp. was incorporated in 2011 and is based in New York, New York.