Comparing Freddie Mac (FMCC) and The Competition

Freddie Mac (OTCMKTS:FMCC) is one of 919 publicly-traded companies in the “Banks” industry, but how does it contrast to its competitors? We will compare Freddie Mac to related businesses based on the strength of its risk, dividends, institutional ownership, analyst recommendations, earnings, valuation and profitability.

Volatility & Risk

Freddie Mac has a beta of 1.75, suggesting that its share price is 75% more volatile than the S&P 500. Comparatively, Freddie Mac’s competitors have a beta of 0.61, suggesting that their average share price is 39% less volatile than the S&P 500.

Earnings and Valuation

This table compares Freddie Mac and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Freddie Mac	$129.82 billion	$10.73 billion	192.35
Freddie Mac Competitors	$222.41 billion	$2.42 billion	20.27

Freddie Mac’s competitors have higher revenue, but lower earnings than Freddie Mac. Freddie Mac is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Insider and Institutional Ownership

48.0% of shares of all “Banks” companies are held by institutional investors. 0.1% of Freddie Mac shares are held by insiders. Comparatively, 9.8% of shares of all “Banks” companies are held 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 Recommendations

This is a breakdown of current ratings and recommmendations for Freddie Mac and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freddie Mac	1	2	1	1	2.40
Freddie Mac Competitors	7470	30209	27786	1473	2.35

Freddie Mac presently has a consensus price target of $8.38, suggesting a potential upside of 117.70%. As a group, “Banks” companies have a potential upside of 17.12%. Given Freddie Mac’s stronger consensus rating and higher probable upside, equities analysts plainly believe Freddie Mac is more favorable than its competitors.

Profitability

This table compares Freddie Mac and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freddie Mac	9.73%	-121.95%	0.38%
Freddie Mac Competitors	15.64%	9.43%	0.93%

Summary

Freddie Mac competitors beat Freddie Mac on 7 of the 13 factors compared.

Freddie Mac Company Profile

Federal Home Loan Mortgage Corporation operates in the secondary mortgage market in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment purchases, securitizes, and guarantees single-family loans; and manages single-family mortgage credit and market risk, as well as manages mortgage-related investments portfolio, single-family securitization activities, and treasury functions. This segment serves mortgage banking companies, commercial banks, regional banks, community banks, credit unions, housing finance agencies, savings institutions, and non-depository financial institutions. The Multifamily segment engages in the purchase, securitization, and guarantee of multifamily loans; issuance of multifamily K certificates; manages multifamily mortgage credit and market risk; and invests in multifamily loans and mortgage-related securities. It serves banks and other financial institutions, insurance companies, money managers, hedge funds, pension funds, state and local governments, and broker dealers. Federal Home Loan Mortgage Corporation incorporated in 1970 and is headquartered in McLean, Virginia.