Contrasting Clipper Realty (NYSE:CLPR) & MFA Financial (NYSE:MFA)

MFA Financial (NYSE:MFA) and Clipper Realty (NYSE:CLPR) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, valuation and dividends.

Valuation and Earnings

This table compares MFA Financial and Clipper Realty”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MFA Financial	$229.72 million	5.85	$80.16 million	($0.08)	-164.63
Clipper Realty	$143.10 million	0.61	-$5.90 million	($0.35)	-15.53

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

Analyst Ratings

This is a summary of current recommendations and price targets for MFA Financial and Clipper Realty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MFA Financial	0	1	4	0	2.80
Clipper Realty	1	1	0	0	1.50

MFA Financial presently has a consensus price target of $13.40, suggesting a potential upside of 1.75%. Given MFA Financial’s stronger consensus rating and higher probable upside, analysts clearly believe MFA Financial is more favorable than Clipper Realty.

Risk and Volatility

MFA Financial has a beta of 2.16, meaning that its stock price is 116% more volatile than the S&P 500. Comparatively, Clipper Realty has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500.

Profitability

This table compares MFA Financial and Clipper Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MFA Financial	14.22%	10.02%	1.76%
Clipper Realty	-2.54%	-85.95%	-0.29%

Institutional & Insider Ownership

65.3% of MFA Financial shares are owned by institutional investors. Comparatively, 37.6% of Clipper Realty shares are owned by institutional investors. 0.7% of MFA Financial shares are owned by insiders. Comparatively, 52.3% of Clipper Realty shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

MFA Financial pays an annual dividend of $1.40 per share and has a dividend yield of 10.6%. Clipper Realty pays an annual dividend of $0.38 per share and has a dividend yield of 7.0%. MFA Financial pays out -1,750.0% of its earnings in the form of a dividend. Clipper Realty pays out -108.6% 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. MFA Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

MFA Financial beats Clipper Realty on 14 of the 16 factors compared between the two stocks.

About MFA Financial

MFA Financial, Inc., together with its subsidiaries, operates as a real estate investment trust in the United States. It invests in residential mortgage securities, including non-agency mortgage-backed securities, agency MBS, and credit risk transfer securities; residential whole loans, including purchased performing loans, purchased credit deteriorated, and non-performing loans; and mortgage servicing rights related assets. The company was incorporated in 1997 and is based in New York, New York.

About Clipper Realty

Clipper Realty Inc. (NYSE: CLPR) is a self-administered and self-managed real estate company that acquires, owns, manages, operates, and repositions multifamily residential and commercial properties in the New York metropolitan area, with a portfolio in Manhattan and Brooklyn.