Financial Analysis: Fannie Mae (FNMA) & Its Rivals

Fannie Mae (OTCMKTS:FNMA) is one of 19 publicly-traded companies in the “FIN – MTG&REL SVS” industry, but how does it compare to its peers? We will compare Fannie Mae to related businesses based on the strength of its institutional ownership, analyst recommendations, profitability, valuation, risk, dividends and earnings.

Risk & Volatility

Fannie Mae has a beta of 1.57, indicating that its share price is 57% more volatile than the S&P 500. Comparatively, Fannie Mae’s peers have a beta of 1.20, indicating that their average share price is 20% more volatile than the S&P 500.

Profitability

This table compares Fannie Mae and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fannie Mae	4.53%	-65.94%	0.50%
Fannie Mae Competitors	3.88%	-27.45%	0.35%

Earnings and Valuation

This table compares Fannie Mae and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Fannie Mae	$159.17 billion	$14.36 billion	675.00
Fannie Mae Competitors	$19.36 billion	$1.63 billion	79.65

Fannie Mae has higher revenue and earnings than its peers. Fannie Mae is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a summary of current recommendations for Fannie Mae and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fannie Mae	1	3	1	2	2.57
Fannie Mae Competitors	257	877	1142	35	2.41

Fannie Mae currently has a consensus target price of $12.75, suggesting a potential upside of 88.89%. As a group, “FIN – MTG&REL SVS” companies have a potential upside of 49.65%. Given Fannie Mae’s stronger consensus rating and higher possible upside, research analysts plainly believe Fannie Mae is more favorable than its peers.

Insider and Institutional Ownership

0.0% of Fannie Mae shares are owned by institutional investors. Comparatively, 52.2% of shares of all “FIN – MTG&REL SVS” companies are owned by institutional investors. 1.0% of Fannie Mae shares are owned by company insiders. Comparatively, 25.6% of shares of all “FIN – MTG&REL SVS” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Fannie Mae beats its peers on 9 of the 13 factors compared.

About Fannie Mae

Federal National Mortgage Association provides financing solutions for mortgages in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment securitizes and purchases single-family fixed-rate or adjustable-rate, first-lien mortgage loans, or mortgage-related securities backed by these loans; and loans that are insured by Federal Housing Administration, loans guaranteed by the Department of Veterans Affairs and Rural Development Housing and Community Facilities Program of the U.S. Department of Agriculture, manufactured housing mortgage loans, and other mortgage-related securities. The Multifamily segment securitizes multifamily mortgage loans into Fannie Mae mortgage backed securities (MBS); purchases multifamily mortgage loans; and provides credit enhancement for bonds issued by state and local housing finance authorities to finance multifamily housing. This segment also issues structured MBS backed by Fannie Mae multifamily MBS; buys and sells multifamily agency mortgage-backed securities; and invests in low-income housing tax credit multifamily projects. Federal National Mortgage Association was founded in 1938 and is based in Washington, the District of Columbia.