Contrasting New Residential Investment Corp. (NRZ) & The Competition

New Residential Investment Corp. (NYSE: NRZ) is one of 32 public companies in the “Mortgage REITs” industry, but how does it compare to its competitors? We will compare New Residential Investment Corp. to similar businesses based on the strength of its profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Earnings & Valuation

This table compares New Residential Investment Corp. and its competitors revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
New Residential Investment Corp. $1.08 billion $504.45 million 5.64
New Residential Investment Corp. Competitors $371.19 million $190.39 million 1.11

New Residential Investment Corp. has higher revenue and earnings than its competitors. New Residential Investment Corp. is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

New Residential Investment Corp. pays an annual dividend of $2.00 per share and has a dividend yield of 11.5%. New Residential Investment Corp. pays out 64.7% of its earnings in the form of a dividend. As a group, “Mortgage REITs” companies pay a dividend yield of 10.0% and pay out 89.8% of their earnings in the form of a dividend. New Residential Investment Corp. has raised its dividend for 3 consecutive years. New Residential Investment Corp. is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Profitability

This table compares New Residential Investment Corp. and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Residential Investment Corp. 60.06% 19.38% 3.99%
New Residential Investment Corp. Competitors 66.88% 10.60% 2.59%

Risk & Volatility

New Residential Investment Corp. has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500. Comparatively, New Residential Investment Corp.’s competitors have a beta of 0.65, suggesting that their average stock price is 35% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for New Residential Investment Corp. and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Residential Investment Corp. 0 1 6 0 2.86
New Residential Investment Corp. Competitors 119 862 884 33 2.44

New Residential Investment Corp. presently has a consensus target price of $18.15, suggesting a potential upside of 4.07%. As a group, “Mortgage REITs” companies have a potential upside of 7.21%. Given New Residential Investment Corp.’s competitors higher possible upside, analysts clearly believe New Residential Investment Corp. has less favorable growth aspects than its competitors.

Institutional and Insider Ownership

48.0% of New Residential Investment Corp. shares are owned by institutional investors. Comparatively, 56.3% of shares of all “Mortgage REITs” companies are owned by institutional investors. 0.5% of New Residential Investment Corp. shares are owned by company insiders. Comparatively, 3.4% of shares of all “Mortgage REITs” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

New Residential Investment Corp. beats its competitors on 10 of the 15 factors compared.

New Residential Investment Corp. Company Profile

New Residential Investment Corp. is a real estate investment trust (REIT). The Company focuses on investing in, and managing, investments related to residential real estate. The Company’s segments include investments in excess mortgage servicing rights (Excess MSRs); investments in mortgage servicing rights (MSRs); investments in servicer advances; investments in real estate securities; investments in residential mortgage loans; investments in consumer loans, and corporate. Its portfolio includes mortgage servicing related assets, residential mortgage backed securities (RMBS), residential mortgage loans and other investments. The Company’s servicing related assets include its investments in Excess MSRs, MSRs and servicer advances. The Company invests in agency RMBS and non-agency RMBS. The Company’s other investments consist of consumer loans.

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