Analyzing Dynex Capital (DX) & The Competition

Dynex Capital (NYSE: DX) is one of 32 publicly-traded companies in the “Mortgage REITs” industry, but how does it contrast to its peers? We will compare Dynex Capital to related businesses based on the strength of its risk, valuation, institutional ownership, analyst recommendations, dividends, profitability and earnings.

Insider and Institutional Ownership

41.7% of Dynex Capital shares are owned by institutional investors. Comparatively, 56.7% of shares of all “Mortgage REITs” companies are owned by institutional investors. 7.1% of Dynex Capital shares are owned by insiders. Comparatively, 3.1% of shares of all “Mortgage REITs” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Dynex Capital and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dynex Capital 0 2 1 0 2.33
Dynex Capital Competitors 118 856 853 33 2.43

Dynex Capital currently has a consensus target price of $7.38, suggesting a potential upside of 6.88%. As a group, “Mortgage REITs” companies have a potential upside of 7.50%. Given Dynex Capital’s peers stronger consensus rating and higher possible upside, analysts plainly believe Dynex Capital has less favorable growth aspects than its peers.

Profitability

This table compares Dynex Capital and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dynex Capital 86.86% 11.08% 1.27%
Dynex Capital Competitors 66.04% 10.52% 2.59%

Volatility and Risk

Dynex Capital has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, Dynex Capital’s peers have a beta of 0.64, suggesting that their average stock price is 36% less volatile than the S&P 500.

Earnings & Valuation

This table compares Dynex Capital and its peers gross revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Dynex Capital $91.90 million $43.09 million 4.79
Dynex Capital Competitors $383.25 million $201.70 million 1.88

Dynex Capital’s peers have higher revenue and earnings than Dynex Capital. Dynex Capital 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.

Dividends

Dynex Capital pays an annual dividend of $0.72 per share and has a dividend yield of 10.4%. Dynex Capital pays out 50.0% of its earnings in the form of a dividend. As a group, “Mortgage REITs” companies pay a dividend yield of 10.5% and pay out 91.4% of their earnings in the form of a dividend.

Summary

Dynex Capital peers beat Dynex Capital on 9 of the 15 factors compared.

About Dynex Capital

Dynex Capital, Inc. is an internally managed mortgage real estate investment trust, which invests in residential and commercial mortgage securities on a leveraged basis. The Company’s objective is to provide attractive risk-adjusted returns to its shareholders over the long term that is reflective of a leveraged fixed income portfolio with a focus on capital preservation. It seeks to provide returns to its shareholders through regular quarterly dividends and through capital appreciation. It invests in Agency and non-Agency mortgage-backed securities (MBS). MBS consists of residential MBS (RMBS), commercial MBS (CMBS) and CMBS interest-only securities. Agency MBS have a guaranty of principal payment by an agency of the United States Government or a government-sponsored entity (GSE), such as Fannie Mae and Freddie Mac.

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