America First Multifamily Investors (NASDAQ: ATAX) and Ally Financial (NYSE:ALLY) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, earnings, profitability and risk.
Volatility and Risk
America First Multifamily Investors has a beta of 0.35, indicating that its share price is 65% less volatile than the S&P 500. Comparatively, Ally Financial has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500.
This table compares America First Multifamily Investors and Ally Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|America First Multifamily Investors||37.79%||10.06%||2.93%|
Valuation & Earnings
This table compares America First Multifamily Investors and Ally Financial’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|America First Multifamily Investors||$70.38 million||5.30||$30.59 million||$0.44||14.05|
|Ally Financial||$9.87 billion||1.21||$929.00 million||$2.39||11.52|
Ally Financial has higher revenue and earnings than America First Multifamily Investors. Ally Financial is trading at a lower price-to-earnings ratio than America First Multifamily Investors, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent recommendations for America First Multifamily Investors and Ally Financial, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|America First Multifamily Investors||0||2||0||0||2.00|
America First Multifamily Investors presently has a consensus price target of $6.00, suggesting a potential downside of 2.91%. Ally Financial has a consensus price target of $32.94, suggesting a potential upside of 19.60%. Given Ally Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Ally Financial is more favorable than America First Multifamily Investors.
America First Multifamily Investors pays an annual dividend of $0.50 per share and has a dividend yield of 8.1%. Ally Financial pays an annual dividend of $0.52 per share and has a dividend yield of 1.9%. America First Multifamily Investors pays out 113.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ally Financial pays out 21.8% of its earnings in the form of a dividend.
Insider and Institutional Ownership
6.6% of America First Multifamily Investors shares are owned by institutional investors. 1.3% of America First Multifamily Investors shares are owned by company insiders. Comparatively, 0.2% of Ally Financial shares are owned by company 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.
America First Multifamily Investors Company Profile
America First Multifamily Investors, L.P. is engaged in acquiring, holding, selling and dealing with a portfolio of mortgage revenue bonds, which have been issued to provide construction and/or permanent financing for multifamily and student housing (collectively Residential Properties) and commercial properties. Its segments are Mortgage Revenue Bond Investments, MF Properties, Public Housing Capital Fund Trusts and mortgage-backed securities (MBS) Investments. Its Mortgage Revenue Bond Investments segment consists of its portfolio of mortgage revenue bonds, which have been issued to provide construction and/or permanent financing for the residential properties and a commercial property. The MF Properties segment consists of indirect equity interests in multifamily, student housing, and senior citizen residential properties, which are not financed by mortgage revenue bonds held by the Company, but which it intends to finance by such bonds through a restructuring.
Ally Financial Company Profile
Ally Financial Inc. provides various financial products and services for consumers, businesses, automotive dealers, and corporate clients in the United States and Canada. The company operates Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations segments. The Automotive Finance Operations segment provides automotive financing services to consumers and automotive dealers. Its automotive finance services include providing retail installment sales contracts, loans and leases, term loans to dealers, financing dealer floorplans, other lines of credit to dealers, warehouse lines to companies, and fleet financing. This segment also offers financing services to companies and municipalities for the purchase or lease of vehicles and equipment, and vehicle remarketing services. The Insurance Operations segment offers consumer finance protection and insurance products through the automotive dealer channel, and commercial insurance products directly to dealers. The Mortgage Finance Operations segment manages held-for-investment consumer mortgage finance loan portfolio that includes bulk purchases of high-quality jumbo and LMI mortgage loans originated by third parties, as well as direct-to-consumer mortgage offerings. The Corporate Finance Operations segment provides senior secured leveraged cash flow and asset-based loans to middle market companies. Its primary focus is on businesses owned by private equity sponsors with loans used for leveraged buyouts, mergers and acquisitions, debt refinancing, restructurings, and working capital. The company, through its subsidiary, Ally Bank, also offers commercial banking products and services. In addition, it provides digital wealth management and online brokerage platform services. The company was formerly known as GMAC Inc. and changed its name to Ally Financial Inc. in May 2010. Ally Financial Inc. was founded in 1919 and is headquartered in Detroit, Michigan.
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