Head to Head Analysis: CTO Realty Growth (NYSE:CTO) vs. Dynex Capital (NYSE:DX)

Dynex Capital (NYSE:DX) and CTO Realty Growth (NYSE:CTO) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Dynex Capital and CTO Realty Growth, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dynex Capital	0	1	4	0	2.80
CTO Realty Growth	0	0	1	2	3.67

Dynex Capital currently has a consensus target price of $13.56, suggesting a potential downside of 1.54%. CTO Realty Growth has a consensus target price of $21.00, suggesting a potential upside of 2.16%. Given CTO Realty Growth’s stronger consensus rating and higher possible upside, analysts clearly believe CTO Realty Growth is more favorable than Dynex Capital.

Volatility and Risk

Dynex Capital has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500. Comparatively, CTO Realty Growth has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.

Insider & Institutional Ownership

38.3% of Dynex Capital shares are owned by institutional investors. Comparatively, 67.2% of CTO Realty Growth shares are owned by institutional investors. 2.5% of Dynex Capital shares are owned by company insiders. Comparatively, 5.3% of CTO Realty Growth shares 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.

Profitability

This table compares Dynex Capital and CTO Realty Growth’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dynex Capital	35.65%	-2.24%	-0.30%
CTO Realty Growth	17.10%	4.04%	1.92%

Earnings and Valuation

This table compares Dynex Capital and CTO Realty Growth”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dynex Capital	$319.53 million	3.42	$113.90 million	$1.47	9.37
CTO Realty Growth	$109.12 million	5.65	$5.53 million	$0.59	34.84

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

Dividends

Dynex Capital pays an annual dividend of $1.80 per share and has a dividend yield of 13.1%. CTO Realty Growth pays an annual dividend of $1.52 per share and has a dividend yield of 7.4%. Dynex Capital pays out 122.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CTO Realty Growth pays out 257.6% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

CTO Realty Growth beats Dynex Capital on 9 of the 17 factors compared between the two stocks.

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.

About CTO Realty Growth

CTO Realty Growth, Inc. is a publicly traded real estate investment trust that owns and operates a portfolio of high-quality, retail-based properties located primarily in higher growth markets in the United States. CTO also externally manages and owns a meaningful interest in Alpine Income Property Trust, Inc. (NYSE: PINE), a publicly traded net lease REIT.