Federal Agricultural Mortgage (NYSE: AGM) and Federal Home Loan Mortgage (OTCMKTS:FMCC) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, dividends, profitability, risk, earnings, analyst recommendations and institutional ownership.
This table compares Federal Agricultural Mortgage and Federal Home Loan Mortgage’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Federal Agricultural Mortgage||20.21%||15.12%||0.43%|
|Federal Home Loan Mortgage||7.53%||-6.71%||0.28%|
Federal Agricultural Mortgage pays an annual dividend of $2.32 per share and has a dividend yield of 2.8%. Federal Home Loan Mortgage does not pay a dividend. Federal Agricultural Mortgage has increased its dividend for 6 consecutive years.
This is a breakdown of current recommendations and price targets for Federal Agricultural Mortgage and Federal Home Loan Mortgage, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Federal Agricultural Mortgage||0||1||1||0||2.50|
|Federal Home Loan Mortgage||0||0||0||0||N/A|
Federal Agricultural Mortgage currently has a consensus target price of $93.50, indicating a potential upside of 11.58%. Given Federal Agricultural Mortgage’s higher probable upside, analysts clearly believe Federal Agricultural Mortgage is more favorable than Federal Home Loan Mortgage.
Insider & Institutional Ownership
64.4% of Federal Agricultural Mortgage shares are owned by institutional investors. Comparatively, 0.0% of Federal Home Loan Mortgage shares are owned by institutional investors. 2.5% of Federal Agricultural Mortgage shares are owned by insiders. Comparatively, 0.1% of Federal Home Loan Mortgage shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Federal Agricultural Mortgage and Federal Home Loan Mortgage’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Federal Agricultural Mortgage||$418.04 million||2.13||$84.48 million||N/A||N/A|
|Federal Home Loan Mortgage||$74.68 billion||0.01||$5.63 billion||N/A||N/A|
Federal Home Loan Mortgage has higher revenue and earnings than Federal Agricultural Mortgage.
Risk & Volatility
Federal Agricultural Mortgage has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, Federal Home Loan Mortgage has a beta of 3.4, suggesting that its stock price is 240% more volatile than the S&P 500.
Federal Agricultural Mortgage beats Federal Home Loan Mortgage on 11 of the 14 factors compared between the two stocks.
Federal Agricultural Mortgage Company Profile
Federal Agricultural Mortgage Corporation provides a secondary market for various loans made to borrowers in the United States. It operates through four segments: Farm & Ranch, USDA Guarantees, Rural Utilities, and Institutional Credit. The Farm & Ranch segment purchases and retains eligible mortgage loans that are secured by first liens on agricultural real estate; securitizes eligible mortgage loans, and guarantees the timely payment of principal and interest on securities representing interests in or obligations secured by pools of mortgage loans; and issues long-term standby purchase commitments on designated eligible mortgage loans. The USDA Guarantees segment purchases portions of certain agricultural, rural development, business and industry, and community facilities loans guaranteed by the United States Department of Agriculture (USDA). The Rural Utilities segment purchases and guarantees securities that are backed by eligible rural electric and telephone loans. The Institutional Credit segment engages in purchasing and guaranteeing general obligations of institutions that are secured by types of loans eligible under the Farm & Ranch, USDA Guarantees, or Rural Utilities lines of business. Federal Agricultural Mortgage Corporation was founded in 1987 and is headquartered in Washington, District of Columbia.
Federal Home Loan Mortgage Company Profile
Federal Home Loan Mortgage Corporation is a government-sponsored enterprise (GSE). The Company is engaged in purchasing residential mortgage loans originated by lenders. The Company also invests in mortgage loans and mortgage-related securities. Its segments include Single-family Guarantee, Multifamily, Investments and All Other. The Single-family Guarantee segment includes the purchase, securitization and guarantee of single-family loans and the management of single-family credit risk. The Multifamily segment includes the purchase, securitization and guarantee of multifamily loans and securities; its investments in these loans and securities, and the management of multifamily mortgage credit risk and mortgage market spread risk. The Investments segment manages its mortgage-related investments portfolio (excluding Multifamily segment investments, single-family seriously delinquent loans, and the credit risk of single-family performing loans), treasury function and interest-rate risk.
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