Head-To-Head Survey: Manhattan Bridge Capital (NASDAQ:LOAN) versus Ally Financial (NYSE:ALLY)

Manhattan Bridge Capital (NASDAQ:LOAN) and Ally Financial (NYSE:ALLY) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, dividends and risk.

Risk and Volatility

Manhattan Bridge Capital has a beta of 0.35, indicating that its share price is 65% less volatile than the S&P 500. Comparatively, Ally Financial has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Profitability

This table compares Manhattan Bridge Capital and Ally Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Manhattan Bridge Capital	59.04%	12.68%	8.07%
Ally Financial	7.64%	9.48%	0.59%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Manhattan Bridge Capital and Ally Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Manhattan Bridge Capital	0	0	0	0	0.00
Ally Financial	0	7	9	0	2.56

Ally Financial has a consensus price target of $45.43, indicating a potential upside of 6.60%. Given Ally Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Ally Financial is more favorable than Manhattan Bridge Capital.

Earnings and Valuation

This table compares Manhattan Bridge Capital and Ally Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Manhattan Bridge Capital	$9.69 million	6.36	$5.59 million	$0.47	11.47
Ally Financial	$8.18 billion	1.60	$668.00 million	$1.54	27.67

Ally Financial has higher revenue and earnings than Manhattan Bridge Capital. Manhattan Bridge Capital is trading at a lower price-to-earnings ratio than Ally Financial, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

21.8% of Manhattan Bridge Capital shares are held by institutional investors. Comparatively, 88.8% of Ally Financial shares are held by institutional investors. 24.5% of Manhattan Bridge Capital shares are held by company insiders. Comparatively, 0.6% of Ally Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Manhattan Bridge Capital pays an annual dividend of $0.46 per share and has a dividend yield of 8.5%. Ally Financial pays an annual dividend of $1.20 per share and has a dividend yield of 2.8%. Manhattan Bridge Capital pays out 97.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ally Financial pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Manhattan Bridge Capital has raised its dividend for 1 consecutive years. Manhattan Bridge Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Ally Financial beats Manhattan Bridge Capital on 10 of the 17 factors compared between the two stocks.

About Manhattan Bridge Capital

Manhattan Bridge Capital, Inc., a real estate finance company, originates, services, and manages a portfolio of first mortgage loans in the United States. The company offers short-term, secured, and non-banking loans to real estate investors to fund acquisition, renovation, rehabilitation, or development of residential or commercial properties. Its loans are secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers. 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. The company was founded in 1989 and is headquartered in Great Neck, New York.

About Ally Financial

Ally Financial Inc., a digital financial-services company, provides various digital financial products and services in the United States, Canada, and Bermuda. The company operates through Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations segments. The Automotive Finance Operations segment offers automotive financing services, including providing retail installment sales contracts, loans and operating leases, term loans to dealers, financing dealer floorplans and other lines of credit to dealers, warehouse lines to automotive retailers, and fleet financing. It also provides financing services to companies and municipalities for the purchase or lease of vehicles, and vehicle-remarketing services. The Insurance Operations segment offers consumer finance protection and insurance products through the automotive dealer channel, and commercial insurance products directly to dealers. This segment provides vehicle service and maintenance contract, and guaranteed asset protection products; and underwrites commercial insurance coverages, which primarily insure dealers’ vehicle inventory. The Mortgage Finance Operations segment manages consumer mortgage loan portfolio that includes bulk purchases of jumbo and low-to-moderate income mortgage loans originated by third parties, as well as direct-to-consumer mortgage offerings. The Corporate Finance Operations segment provides senior secured leveraged cash flow and asset-based loans to middle market companies; leveraged loans; and commercial real estate product to serve companies in the nursing facilities, senior housing, and medical office buildings. It also offers commercial banking products and services. In addition, it provides securities brokerage and investment advisory services. The company was formerly known as GMAC Inc. and changed its name to Ally Financial Inc. in May 2010. Ally Financial Inc. was founded in 1919 and is based in Detroit, Michigan.