Critical Contrast: Dynex Capital (NYSE:DX) and Healthcare Realty Trust (NYSE:HR)

Dynex Capital (NYSE:DX) and Healthcare Realty Trust (NYSE:HR) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Profitability

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

Net Margins Return on Equity Return on Assets
Dynex Capital -118.97% 14.39% 1.08%
Healthcare Realty Trust 8.00% 2.11% 1.09%

Risk and Volatility

Dynex Capital has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500. Comparatively, Healthcare Realty Trust has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Dynex Capital and Healthcare Realty Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dynex Capital 0 0 1 0 3.00
Healthcare Realty Trust 0 6 4 0 2.40

Dynex Capital presently has a consensus price target of $17.50, suggesting a potential upside of 28.11%. Healthcare Realty Trust has a consensus price target of $32.13, suggesting a potential upside of 14.81%. Given Dynex Capital’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Dynex Capital is more favorable than Healthcare Realty Trust.

Valuation & Earnings

This table compares Dynex Capital and Healthcare Realty Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dynex Capital $170.17 million 1.84 -$152.67 million $2.09 6.54
Healthcare Realty Trust $470.30 million 8.03 $39.19 million $1.60 17.49

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

Dividends

Dynex Capital pays an annual dividend of $1.56 per share and has a dividend yield of 11.4%. Healthcare Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 4.3%. Dynex Capital pays out 74.6% of its earnings in the form of a dividend. Healthcare Realty Trust pays out 75.0% 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. Dynex Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

52.3% of Dynex Capital shares are held by institutional investors. Comparatively, 95.8% of Healthcare Realty Trust shares are held by institutional investors. 4.6% of Dynex Capital shares are held by company insiders. Comparatively, 0.8% of Healthcare Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dynex Capital Company Profile

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 corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Dynex Capital, Inc. was founded in 1987 and is headquartered in Glen Allen, Virginia.

Healthcare Realty Trust Company Profile

Healthcare Realty Trust is a real estate investment trust that integrates owning, managing, financing and developing income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of December 31, 2018, the Company owned 199 real estate properties in 27 states totaling 14.8 million square feet and was valued at approximately $4.9 billion. The Company provided leasing and property management services to 11.2 million square feet nationwide.

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