Great Ajax Corp. (NYSE: AJX) and Five Oaks Investment Corp. (NYSE:OAKS) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, earnings, analyst recommendations and profitability.
This is a breakdown of recent recommendations and price targets for Great Ajax Corp. and Five Oaks Investment Corp., as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Great Ajax Corp.||0||2||2||0||2.50|
|Five Oaks Investment Corp.||0||2||0||0||2.00|
Great Ajax Corp. presently has a consensus price target of $15.13, suggesting a potential upside of 6.29%. Five Oaks Investment Corp. has a consensus price target of $6.50, suggesting a potential upside of 63.32%. Given Five Oaks Investment Corp.’s higher probable upside, analysts plainly believe Five Oaks Investment Corp. is more favorable than Great Ajax Corp..
Valuation & Earnings
This table compares Great Ajax Corp. and Five Oaks Investment Corp.’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Great Ajax Corp.||$50.65 million||4.95||$27.67 million||$1.57||9.06|
|Five Oaks Investment Corp.||$26.49 million||3.33||$14.83 million||$0.67||5.94|
Great Ajax Corp. has higher revenue and earnings than Five Oaks Investment Corp.. Five Oaks Investment Corp. is trading at a lower price-to-earnings ratio than Great Ajax Corp., indicating that it is currently the more affordable of the two stocks.
This table compares Great Ajax Corp. and Five Oaks Investment Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Great Ajax Corp.||58.46%||10.22%||3.02%|
|Five Oaks Investment Corp.||12.65%||10.48%||0.48%|
Insider & Institutional Ownership
74.4% of Great Ajax Corp. shares are held by institutional investors. Comparatively, 30.6% of Five Oaks Investment Corp. shares are held by institutional investors. 3.8% of Great Ajax Corp. shares are held by company insiders. Comparatively, 0.9% of Five Oaks Investment Corp. shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Volatility & Risk
Great Ajax Corp. has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Five Oaks Investment Corp. has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500.
Great Ajax Corp. pays an annual dividend of $1.20 per share and has a dividend yield of 8.4%. Five Oaks Investment Corp. pays an annual dividend of $0.60 per share and has a dividend yield of 15.1%. Great Ajax Corp. pays out 76.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Five Oaks Investment Corp. pays out 89.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Great Ajax Corp. beats Five Oaks Investment Corp. on 12 of the 16 factors compared between the two stocks.
Great Ajax Corp. Company Profile
Great Ajax Corp. is an externally managed real estate company. The Company is focused on acquiring, investing in and managing a portfolio of re-performing and non-performing mortgage loans secured by single-family residences and single-family properties. Its segment is focused on non-performing mortgages and re-performing mortgages. It also invests in loans secured by multi-family residential and commercial mixed use retail/residential properties, as well as in the properties directly. It also holds real estate-owned properties (REO) acquired upon the foreclosure or other settlement of its owned non-performing loans, as well as through outright purchases. It is managed by Thetis Asset Management LLC, an affiliated entity. Its mortgage loans and other real estate assets are serviced by Gregory Funding LLC, an affiliated entity. The Company conducts its business through its operating partnership, Great Ajax Operating Partnership L.P.
Five Oaks Investment Corp. Company Profile
Five Oaks Investment Corp. is a real estate investment trust. The Company is focused on investing on a leveraged basis in mortgage and other real estate-related assets, particularly residential mortgage loans and mortgage-backed securities (MBS). The Company invests in various assets, such as Agency residential MBS (RMBS); securitizations backed by multi-family mortgage loans, or Multi-Family MBS; residential mortgage loans and other mortgage-related investments, including mortgage servicing rights (MSRs), and Non-Agency RMBS. The Company finances its investments in Agency RMBS, Multi-Family MBS, residential mortgage loans and Non-Agency RMBS primarily through short-term borrowings structured as repurchase agreements. The Company is externally managed and advised by Oak Circle Capital Partners LLC.
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