Critical Comparison: Orchid Island Capital (NYSE:ORC) and New York City REIT (NYSE:NYC)

Orchid Island Capital (NYSE:ORC – Get Rating) and New York City REIT (NYSE:NYC – Get Rating) are both small cap finance companies, but which is the best investment? We will compare the two companies based on their risk strength, valuation, institutional ownership, analyst recommendations, dividends, earnings and profitability.

Valuation and benefits

This chart compares revenue, earnings per share (EPS), and valuation of Orchid Island Capital and New York City REIT.

New York City REIT has lower revenues, but higher profits than Orchid Island Capital. New York City REIT trades at a lower price-to-earnings ratio than Orchid Island Capital, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares the net margins, return on equity and return on assets of Orchid Island Capital and New York City REIT.

Analyst Notes

This is a breakdown of recent ratings from Orchid Island Capital and New York City REIT, as provided by MarketBeat.

Orchid Island Capital currently has a consensus price target of $4.25, suggesting a potential upside of 45.55%. New York City REIT has a consensus price target of $10.00, suggesting a potential upside of 14.94%. Given Orchid Island Capital’s possible higher upside, analysts clearly believe that Orchid Island Capital is more favorable than New York City REIT.

Insider and Institutional Ownership

21.8% of the shares of Orchid Island Capital are held by institutional investors. By comparison, 28.6% of New York City REIT shares are held by institutional investors. 0.5% of the shares of Orchid Island Capital are held by insiders. By comparison, 0.2% of New York City REIT shares are held by insiders. Strong institutional ownership indicates that hedge funds, large money managers, and endowments believe a company is poised for long-term growth.

Dividends

Orchid Island Capital pays an annual dividend of $0.54 per share and has a dividend yield of 18.5%. New York City REIT pays an annual dividend of $0.40 per share and has a dividend yield of 4.6%. Orchid Island Capital pays -50.0% of its earnings as a dividend. New York City REIT pays -14.0% of its earnings as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Orchid Island Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and risk

Orchid Island Capital has a beta of 1.33, meaning its stock price is 33% more volatile than the S&P 500. By comparison, New York City REIT has a beta of 0.38, meaning its stock price is 62% less volatile than the S&P 500. .

Summary

Orchid Island Capital beats New York City REIT on 12 out of 14 factors compared between the two stocks.

Orchid Island Capital Company Profile (Get a rating)

Orchid Island Capital, Inc., a specialty finance company, invests in residential mortgage-backed securities (RMBS) in the United States. The Company’s RMBS is backed by single-family residential mortgages, called Agency RMBS. Its portfolio includes traditional transfer agency RMBS, such as mortgage transfer certificates and secured mortgage bonds; and structured agency RMBS comprising interest only securities, inverse interest only securities and principal only securities. The Company is considered a real estate investment trust for federal income tax purposes. Orchid Island Capital, Inc. was incorporated in 2010 and is based in Vero Beach, Florida.

New York REIT Company Profile (Get a rating)

New York City REIT, Inc. (NYSE: NYC) is a NYSE-listed real estate investment trust that owns a portfolio of high-quality commercial real estate located in New York City’s five boroughs.

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