Analyzing SL Green Realty (NYSE:SLG) & Capstead Mortgage (NYSE:CMO)

SL Green Realty (NYSE:SLG) and Capstead Mortgage (NYSE:CMO) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Profitability

This table compares SL Green Realty and Capstead Mortgage’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SL Green Realty 32.04% 5.84% 2.52%
Capstead Mortgage 74.89% 10.89% 0.86%

Valuation and Earnings

This table compares SL Green Realty and Capstead Mortgage’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SL Green Realty $1.05 billion 4.76 $379.80 million $7.11 10.16
Capstead Mortgage $186.74 million 3.58 -$129.57 million $0.65 10.62

SL Green Realty has higher revenue and earnings than Capstead Mortgage. SL Green Realty is trading at a lower price-to-earnings ratio than Capstead Mortgage, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for SL Green Realty and Capstead Mortgage, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SL Green Realty 1 5 1 0 2.00
Capstead Mortgage 0 0 0 0 N/A

SL Green Realty currently has a consensus target price of $75.75, indicating a potential upside of 4.89%. Given SL Green Realty’s higher probable upside, analysts plainly believe SL Green Realty is more favorable than Capstead Mortgage.

Institutional and Insider Ownership

87.1% of SL Green Realty shares are held by institutional investors. Comparatively, 71.5% of Capstead Mortgage shares are held by institutional investors. 4.0% of SL Green Realty shares are held by company insiders. Comparatively, 2.4% of Capstead Mortgage shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

SL Green Realty has a beta of 1.63, meaning that its stock price is 63% more volatile than the S&P 500. Comparatively, Capstead Mortgage has a beta of 1.55, meaning that its stock price is 55% more volatile than the S&P 500.

Dividends

SL Green Realty pays an annual dividend of $3.64 per share and has a dividend yield of 5.0%. Capstead Mortgage pays an annual dividend of $0.60 per share and has a dividend yield of 8.7%. SL Green Realty pays out 51.2% of its earnings in the form of a dividend. Capstead Mortgage pays out 92.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SL Green Realty has increased its dividend for 1 consecutive years.

Summary

SL Green Realty beats Capstead Mortgage on 13 of the 16 factors compared between the two stocks.

SL Green Realty Company Profile

SL Green Realty Corp. operates as a real estate investment trust. The firm engages in the acquisition, development, ownership, management and operation of commercial and residential real estate properties. It operates through the Real Estate, and Debt & Preferred Equity Investments business segments. The Real Estate segment consists of security, maintenance, utility costs, real estate taxes, and at certain properties ground rent expense. The Debt & Preferred Equity Investments segment includes cash flow from operations, cash on hand, and other forms of secured or unsecured financing. The company was founded by Stephen L. Green in June 1997 and is headquartered in New York, NY.

Capstead Mortgage Company Profile

Capstead Mortgage Corp. operates as a self-managed real estate investment trust. It invests in a leveraged portfolio of residential mortgage pass-through securities consisting of adjustable-rate mortgage securities issued and guaranteed by government-sponsored enterprises, or by an agency of the federal government. The company was founded in 1985 and is headquartered in Dallas, TX.

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