Contrasting Transcontinental Realty Investors (NYSE:TCI) and Annaly Capital Management (NYSE:NLY)

Annaly Capital Management (NYSE:NLY) and Transcontinental Realty Investors (NYSE:TCI) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, earnings, valuation and dividends.

Institutional and Insider Ownership

51.6% of Annaly Capital Management shares are owned by institutional investors. 0.2% of Annaly Capital Management shares are owned by company insiders. Comparatively, 85.6% of Transcontinental Realty Investors shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Annaly Capital Management and Transcontinental Realty Investors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Annaly Capital Management	0	2	5	0	2.71
Transcontinental Realty Investors	0	0	0	0	N/A

Annaly Capital Management presently has a consensus price target of $21.07, suggesting a potential upside of 3.29%. Given Annaly Capital Management’s higher probable upside, equities analysts clearly believe Annaly Capital Management is more favorable than Transcontinental Realty Investors.

Profitability

This table compares Annaly Capital Management and Transcontinental Realty Investors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Annaly Capital Management	-8.38%	15.13%	1.63%
Transcontinental Realty Investors	9.91%	0.59%	0.47%

Earnings and Valuation

This table compares Annaly Capital Management and Transcontinental Realty Investors’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Annaly Capital Management	$3.73 billion	2.74	-$1.64 billion	($0.97)	-21.05
Transcontinental Realty Investors	$49.90 million	N/A	$5.94 million	$0.58	50.95

Transcontinental Realty Investors has lower revenue, but higher earnings than Annaly Capital Management. Annaly Capital Management is trading at a lower price-to-earnings ratio than Transcontinental Realty Investors, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Annaly Capital Management has a beta of 1.54, indicating that its share price is 54% more volatile than the S&P 500. Comparatively, Transcontinental Realty Investors has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Summary

Annaly Capital Management beats Transcontinental Realty Investors on 7 of the 12 factors compared between the two stocks.

About Annaly Capital Management

Annaly Capital Management, Inc., a diversified capital manager, engages in mortgage finance. The company invests in agency mortgage-backed securities collateralized by residential mortgages; non-agency residential whole loans and securitized products within the residential and commercial markets; mortgage servicing rights; agency commercial mortgage-backed securities; to-be-announced forward contracts; residential mortgage loans; and agency or private label credit risk transfer securities. It has elected to be taxed as a real estate investment trust (REIT). As a REIT, it is not subject to federal income tax to the extent that it distributes its taxable income to its shareholders. The company was incorporated in 1996 and is based in New York, New York.

About Transcontinental Realty Investors

Transcontinental Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of equity real estate located across the U.S., including office buildings, apartments, shopping centers, and developed and undeveloped land. The Company invests in real estate through direct ownership, leases and partnerships and invests in mortgage loans on real estate. The Company also holds mortgage receivables.