Financial Contrast: ARMOUR Residential REIT (NYSE:ARR) vs. DigitalBridge Group (NYSE:DBRG)

DigitalBridge Group (NYSE:DBRG) and ARMOUR Residential REIT (NYSE:ARR) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Earnings and Valuation

This table compares DigitalBridge Group and ARMOUR Residential REIT”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DigitalBridge Group	$228.14 million	9.64	$70.52 million	($0.04)	-302.00
ARMOUR Residential REIT	$550.95 million	2.55	-$14.39 million	($0.24)	-63.88

DigitalBridge Group has higher earnings, but lower revenue than ARMOUR Residential REIT. DigitalBridge Group is trading at a lower price-to-earnings ratio than ARMOUR Residential REIT, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

DigitalBridge Group has a beta of 1.63, meaning that its stock price is 63% more volatile than the S&P 500. Comparatively, ARMOUR Residential REIT has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500.

Insider and Institutional Ownership

92.7% of DigitalBridge Group shares are owned by institutional investors. Comparatively, 54.2% of ARMOUR Residential REIT shares are owned by institutional investors. 3.6% of DigitalBridge Group shares are owned by insiders. Comparatively, 0.4% of ARMOUR Residential REIT shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

DigitalBridge Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. ARMOUR Residential REIT pays an annual dividend of $2.88 per share and has a dividend yield of 18.8%. DigitalBridge Group pays out -100.0% of its earnings in the form of a dividend. ARMOUR Residential REIT pays out -1,200.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. ARMOUR Residential REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares DigitalBridge Group and ARMOUR Residential REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DigitalBridge Group	18.57%	4.14%	1.97%
ARMOUR Residential REIT	-4.55%	15.89%	1.64%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for DigitalBridge Group and ARMOUR Residential REIT, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DigitalBridge Group	0	1	5	2	3.13
ARMOUR Residential REIT	0	5	1	0	2.17

DigitalBridge Group presently has a consensus target price of $16.14, indicating a potential upside of 33.63%. ARMOUR Residential REIT has a consensus target price of $15.50, indicating a potential upside of 1.11%. Given DigitalBridge Group’s stronger consensus rating and higher possible upside, analysts plainly believe DigitalBridge Group is more favorable than ARMOUR Residential REIT.

Summary

DigitalBridge Group beats ARMOUR Residential REIT on 12 of the 17 factors compared between the two stocks.

About DigitalBridge Group

DigitalBridge is an infrastructure investment firm specializing in digital infrastructure assets. They provide services to institutional investors. They primarily invest in data centers, cell towers, fiber networks, small cells, and edge infrastructure. DigitalBridge Group, Inc. was founded in 1991 and is headquartered in Boca Raton, Florida with additional offices in Los Angles, California, and New York New York.

About ARMOUR Residential REIT

ARMOUR Residential REIT, Inc. invests in residential mortgage-backed securities (MBS) in the United States. Its securities portfolio primarily consists of the United States Government-sponsored entity's (GSE) and the Government National Mortgage Administration's issued or guaranteed securities backed by fixed rate, hybrid adjustable rate, and adjustable-rate home loans; and unsecured notes and bonds issued by the GSE and the United States treasuries, as well as money market instruments. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. ARMOUR Residential REIT, Inc. was incorporated in 2008 and is based in Vero Beach, Florida.