Analyzing Simon Property Group (NYSE:SPG) & Dynex Capital (NYSE:DX)

Simon Property Group (NYSE:SPG) and Dynex Capital (NYSE:DX) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Dividends

Simon Property Group pays an annual dividend of $7.80 per share and has a dividend yield of 5.5%. Dynex Capital pays an annual dividend of $1.56 per share and has a dividend yield of 12.9%. Simon Property Group pays out 111.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dynex Capital pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Simon Property Group has raised its dividend for 4 consecutive years.

Insider & Institutional Ownership

93.0% of Simon Property Group shares are owned by institutional investors. Comparatively, 38.3% of Dynex Capital shares are owned by institutional investors. 8.5% of Simon Property Group shares are owned by company insiders. Comparatively, 2.5% of Dynex Capital shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Simon Property Group and Dynex Capital’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Simon Property Group	$5.66 billion	8.23	$2.28 billion	$6.98	20.48
Dynex Capital	$207.52 million	3.73	-$6.13 million	$1.17	10.32

Simon Property Group has higher revenue and earnings than Dynex Capital. Dynex Capital is trading at a lower price-to-earnings ratio than Simon Property Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings for Simon Property Group and Dynex Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Simon Property Group	0	4	4	0	2.50
Dynex Capital	0	2	3	0	2.60

Simon Property Group currently has a consensus price target of $140.22, suggesting a potential downside of 1.89%. Dynex Capital has a consensus price target of $13.31, suggesting a potential upside of 10.20%. Given Dynex Capital’s stronger consensus rating and higher probable upside, analysts plainly believe Dynex Capital is more favorable than Simon Property Group.

Profitability

This table compares Simon Property Group and Dynex Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Simon Property Group	42.30%	70.97%	7.18%
Dynex Capital	30.50%	-7.25%	-0.92%

Volatility & Risk

Simon Property Group has a beta of 1.68, meaning that its stock price is 68% more volatile than the S&P 500. Comparatively, Dynex Capital has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.

Summary

Simon Property Group beats Dynex Capital on 14 of the 17 factors compared between the two stocks.

About Simon Property Group

Simon is a real estate investment trust engaged in the ownership of premier shopping, dining, entertainment and mixed-use destinations and an S&P 100 company (Simon Property Group, NYSE: SPG). Our properties across North America, Europe and Asia provide community gathering places for millions of people every day and generate billions in annual sales.

About Dynex Capital

Dynex Capital, Inc., a mortgage real estate investment trust, invests in mortgage-backed securities (MBS) on a leveraged basis in the United States. It invests in agency and non-agency MBS consisting of residential MBS, commercial MBS (CMBS), and CMBS interest-only securities. Agency MBS have a guaranty of principal payment by an agency of the U.S. government or a U.S. government-sponsored entity, such as Fannie Mae and Freddie Mac. Non-Agency MBS have no such guaranty of payment. The company has qualified as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders as dividends. Dynex Capital, Inc. was incorporated in 1987 and is headquartered in Glen Allen, Virginia.