Critical Review: Dynex Capital (NYSE:DX) and Lineage (NASDAQ:LINE)

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

Institutional and Insider Ownership

38.3% of Dynex Capital shares are held by institutional investors. 1.4% of Lineage shares are held by insiders. Comparatively, 2.5% of Dynex Capital shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Lineage and Dynex Capital”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lineage	$5.33 billion	2.42	-$77.40 million	N/A	N/A
Dynex Capital	$123.18 million	8.05	-$6.13 million	$1.26	9.92

Dynex Capital has lower revenue, but higher earnings than Lineage.

Dividends

Lineage pays an annual dividend of $2.11 per share and has a dividend yield of 3.7%. Dynex Capital pays an annual dividend of $1.80 per share and has a dividend yield of 14.4%. Dynex Capital pays out 142.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lineage	-12.18%	-9.89%	-3.51%
Dynex Capital	28.83%	-4.80%	-0.63%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Lineage and Dynex Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lineage	0	6	10	1	2.71
Dynex Capital	0	1	4	0	2.80

Lineage presently has a consensus target price of $87.31, indicating a potential upside of 54.62%. Dynex Capital has a consensus target price of $13.56, indicating a potential upside of 8.50%. Given Lineage’s higher possible upside, research analysts plainly believe Lineage is more favorable than Dynex Capital.

Summary

Dynex Capital beats Lineage on 9 of the 14 factors compared between the two stocks.

About Lineage

Lineage, Inc. is the world’s largest global temperature-controlled warehouse REIT with a network of over 480 strategically located facilities totaling over 84.1 million square feet and 3.0 billion cubic feet of capacity across countries in North America, Europe, and Asia-Pacific. Coupling end-to-end supply chain solutions and technology, Lineage partners with some of the world’s largest food and beverage producers, retailers, and distributors to help increase distribution efficiency, advance sustainability, minimize supply chain waste, and, most importantly, feed the world.

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.