Angel Oak Mortgage REIT (NYSE:AOMR – Get Free Report) and NexPoint Real Estate Finance (NYSE:NREF – Get Free Report) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, analyst recommendations, profitability, earnings and valuation.
Profitability
This table compares Angel Oak Mortgage REIT and NexPoint Real Estate Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Angel Oak Mortgage REIT | 30.83% | 2.65% | 0.29% |
| NexPoint Real Estate Finance | 75.32% | 24.54% | 1.43% |
Earnings and Valuation
This table compares Angel Oak Mortgage REIT and NexPoint Real Estate Finance”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Angel Oak Mortgage REIT | $110.43 million | 2.02 | $28.75 million | $1.50 | 6.31 |
| NexPoint Real Estate Finance | $72.51 million | 3.58 | $29.19 million | $2.27 | 6.46 |
NexPoint Real Estate Finance has lower revenue, but higher earnings than Angel Oak Mortgage REIT. Angel Oak Mortgage REIT is trading at a lower price-to-earnings ratio than NexPoint Real Estate Finance, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Angel Oak Mortgage REIT has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500. Comparatively, NexPoint Real Estate Finance has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500.
Insider & Institutional Ownership
80.2% of Angel Oak Mortgage REIT shares are owned by institutional investors. Comparatively, 67.8% of NexPoint Real Estate Finance shares are owned by institutional investors. 2.5% of Angel Oak Mortgage REIT shares are owned by company insiders. Comparatively, 54.0% of NexPoint Real Estate Finance shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Dividends
Angel Oak Mortgage REIT pays an annual dividend of $1.28 per share and has a dividend yield of 13.5%. NexPoint Real Estate Finance pays an annual dividend of $2.00 per share and has a dividend yield of 13.6%. Angel Oak Mortgage REIT pays out 85.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NexPoint Real Estate Finance pays out 88.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Analyst Ratings
This is a breakdown of current ratings for Angel Oak Mortgage REIT and NexPoint Real Estate Finance, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Angel Oak Mortgage REIT | 0 | 1 | 5 | 0 | 2.83 |
| NexPoint Real Estate Finance | 0 | 3 | 0 | 0 | 2.00 |
Angel Oak Mortgage REIT presently has a consensus price target of $11.92, suggesting a potential upside of 25.84%. NexPoint Real Estate Finance has a consensus price target of $14.50, suggesting a potential downside of 1.19%. Given Angel Oak Mortgage REIT’s stronger consensus rating and higher possible upside, equities analysts plainly believe Angel Oak Mortgage REIT is more favorable than NexPoint Real Estate Finance.
Summary
NexPoint Real Estate Finance 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 NexPoint Real Estate Finance
NexPoint Real Estate Finance, Inc. operates as a commercial mortgage real estate investment trust in the United States. It focuses on originating, structuring, and investing in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties, and common equity investments, as well as multifamily and single-family rental commercial mortgage-backed securities securitizations, multifamily structured credit risk notes, and mortgage-backed securities or target assets. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. NexPoint Real Estate Finance, Inc. was incorporated in 2019 and is based in Dallas, Texas.
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