Critical Review: AGNC Investment (NASDAQ:AGNCM) and Angel Oak Mortgage REIT (NYSE:AOMR)

AGNC Investment (NASDAQ:AGNCM) and Angel Oak Mortgage REIT (NYSE:AOMR) are both 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.

Valuation & Earnings

This table compares AGNC Investment and Angel Oak Mortgage REIT”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AGNC Investment	$2.40 billion	N/A	N/A	N/A	N/A
Angel Oak Mortgage REIT	$143.65 million	1.46	$44.02 million	$0.75	12.03

Angel Oak Mortgage REIT has lower revenue, but higher earnings than AGNC Investment.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for AGNC Investment and Angel Oak Mortgage REIT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AGNC Investment	0	0	0	0	0.00
Angel Oak Mortgage REIT	0	3	3	0	2.50

Angel Oak Mortgage REIT has a consensus price target of $10.06, suggesting a potential upside of 11.56%. Given Angel Oak Mortgage REIT’s stronger consensus rating and higher probable upside, analysts plainly believe Angel Oak Mortgage REIT is more favorable than AGNC Investment.

Profitability

This table compares AGNC Investment and Angel Oak Mortgage REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AGNC Investment	N/A	N/A	N/A
Angel Oak Mortgage REIT	11.85%	7.74%	0.71%

Dividends

AGNC Investment pays an annual dividend of $1.72 per share and has a dividend yield of 6.8%. Angel Oak Mortgage REIT pays an annual dividend of $1.28 per share and has a dividend yield of 14.2%. Angel Oak Mortgage REIT pays out 170.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

80.2% of Angel Oak Mortgage REIT shares are held by institutional investors. 2.9% of Angel Oak Mortgage REIT 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.

Summary

Angel Oak Mortgage REIT beats AGNC Investment on 9 of the 11 factors compared between the two stocks.

About AGNC Investment

AGNC Investment Corp. provides private capital to housing market in the United States. It invests in residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by the United States government-sponsored enterprise or by the United States government agency. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as American Capital Agency Corp. and changed its name to AGNC Investment Corp. in September 2016. AGNC Investment Corp. was incorporated in 2008 and is headquartered in Bethesda, Maryland.

About Angel Oak Mortgage REIT

Angel Oak Mortgage REIT, Inc., a real estate finance company, focuses on acquiring and investing in first lien non- qualified mortgage loans and other mortgage-related assets in the United States mortgage market. It offers investment securities; residential mortgage loans; and commercial mortgage loans. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was incorporated in 2018 and is headquartered in Atlanta, Georgia.