Head to Head Comparison: Dynex Capital (NYSE:DX) versus Seven Hills Realty Trust (NASDAQ:SEVN)

Dynex Capital (NYSE:DX) and Seven Hills Realty Trust (NASDAQ:SEVN) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, earnings, institutional ownership and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Dynex Capital and Seven Hills Realty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dynex Capital	1	1	3	0	2.40
Seven Hills Realty Trust	0	1	5	0	2.83

Dynex Capital currently has a consensus price target of $13.38, suggesting a potential upside of 21.21%. Seven Hills Realty Trust has a consensus price target of $10.12, suggesting a potential upside of 66.80%. Given Seven Hills Realty Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Seven Hills Realty Trust is more favorable than Dynex Capital.

Institutional & Insider Ownership

38.3% of Dynex Capital shares are owned by institutional investors. 0.8% of Dynex Capital shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Dynex Capital pays an annual dividend of $2.04 per share and has a dividend yield of 18.5%. Seven Hills Realty Trust pays an annual dividend of $1.40 per share and has a dividend yield of 23.1%. Dynex Capital pays out 971.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Seven Hills Realty Trust pays out 96.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dynex Capital has increased its dividend for 5 consecutive years. Seven Hills Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Dynex Capital and Seven Hills Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dynex Capital	-4.65%	10.45%	1.23%
Seven Hills Realty Trust	N/A	N/A	N/A

Valuation & Earnings

This table compares Dynex Capital and Seven Hills Realty Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dynex Capital	$16.95 million	161.07	$319.07 million	$0.21	52.55
Seven Hills Realty Trust	$25.58 million	N/A	N/A	$1.46	4.16

Dynex Capital has higher earnings, but lower revenue than Seven Hills Realty Trust. Seven Hills Realty Trust is trading at a lower price-to-earnings ratio than Dynex Capital, indicating that it is currently the more affordable of the two stocks.

Summary

Seven Hills Realty Trust beats Dynex Capital on 8 of the 14 factors compared between the two stocks.

About Dynex Capital

Dynex Capital, Inc., a mortgage real estate investment trust, invests in mortgage-backed securities (MBS) on a leveraged basis in the United States. It invests in agency and non-agency MBS consisting of residential MBS, commercial MBS (CMBS), and CMBS interest-only securities. Agency MBS have a guaranty of principal payment by an agency of the U.S. government or a U.S. government-sponsored entity, such as Fannie Mae and Freddie Mac. Non-Agency MBS have no such guaranty of payment. The company has qualified as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders as dividends. Dynex Capital, Inc. was incorporated in 1987 and is headquartered in Glen Allen, Virginia.

About Seven Hills Realty Trust

Seven Hills Realty Trust, a real estate investment trust, focuses on originating and investing in first mortgage loans secured by middle market and transitional commercial real estate in the United States. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was formerly known as RMR Mortgage Trust. Seven Hills Realty Trust was incorporated in 2008 and is headquartered in Newton, Massachusetts.