Head to Head Review: CubeSmart (NYSE:CUBE) and Dynex Capital (NYSE:DX)

Dynex Capital (NYSE:DX) and CubeSmart (NYSE:CUBE) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Profitability

This table compares Dynex Capital and CubeSmart’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%
CubeSmart	37.79%	14.33%	6.48%

Valuation and Earnings

This table compares Dynex Capital and CubeSmart”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dynex Capital	$150.40 million	7.28	$113.90 million	$1.47	7.74
CubeSmart	$1.07 billion	8.04	$410.76 million	$1.72	21.88

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Dynex Capital and CubeSmart, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dynex Capital	0	1	3	0	2.75
CubeSmart	0	9	4	0	2.31

Dynex Capital presently has a consensus price target of $13.33, suggesting a potential upside of 17.11%. CubeSmart has a consensus price target of $47.31, suggesting a potential upside of 25.70%. Given CubeSmart’s higher possible upside, analysts clearly believe CubeSmart is more favorable than Dynex Capital.

Institutional & Insider Ownership

38.3% of Dynex Capital shares are owned by institutional investors. Comparatively, 97.6% of CubeSmart shares are owned by institutional investors. 2.5% of Dynex Capital shares are owned by insiders. Comparatively, 1.7% of CubeSmart shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Dynex Capital pays an annual dividend of $2.04 per share and has a dividend yield of 17.9%. CubeSmart pays an annual dividend of $2.08 per share and has a dividend yield of 5.5%. Dynex Capital pays out 138.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CubeSmart pays out 120.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CubeSmart has increased its dividend for 16 consecutive years.

Volatility & Risk

Dynex Capital has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, CubeSmart has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500.

Summary

CubeSmart beats Dynex Capital on 13 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 CubeSmart

CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and, in most locations, climate-controlled storage space for residential and commercial customers. According to the 2023 Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.