Analyzing Saul Centers (BFS) & Five Oaks Investment (OAKS)

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Saul Centers (NYSE: BFS) and Five Oaks Investment (NYSE:OAKS) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Dividends

Saul Centers pays an annual dividend of $2.08 per share and has a dividend yield of 3.9%. Five Oaks Investment pays an annual dividend of $0.24 per share and has a dividend yield of 7.0%. Saul Centers pays out 65.4% of its earnings in the form of a dividend. Five Oaks Investment pays out 50.0% 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. Saul Centers has increased its dividend for 4 consecutive years. Five Oaks Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Saul Centers and Five Oaks Investment’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Saul Centers $227.29 million 5.18 $48.25 million $3.18 16.76
Five Oaks Investment $86.56 million 0.88 $4.70 million $0.48 7.17

Saul Centers has higher revenue and earnings than Five Oaks Investment. Five Oaks Investment is trading at a lower price-to-earnings ratio than Saul Centers, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

45.5% of Saul Centers shares are held by institutional investors. Comparatively, 33.6% of Five Oaks Investment shares are held by institutional investors. 48.8% of Saul Centers shares are held by insiders. Comparatively, 0.9% of Five Oaks Investment shares are held 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.

Profitability

This table compares Saul Centers and Five Oaks Investment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Saul Centers 20.92% 22.47% 3.31%
Five Oaks Investment 14.26% 8.40% 0.37%

Analyst Recommendations

This is a summary of current ratings for Saul Centers and Five Oaks Investment, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Saul Centers 0 3 1 0 2.25
Five Oaks Investment 0 0 1 0 3.00

Saul Centers presently has a consensus price target of $54.50, indicating a potential upside of 2.25%. Given Saul Centers’ higher possible upside, equities research analysts clearly believe Saul Centers is more favorable than Five Oaks Investment.

Risk & Volatility

Saul Centers has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, Five Oaks Investment has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Summary

Saul Centers beats Five Oaks Investment on 12 of the 16 factors compared between the two stocks.

Saul Centers Company Profile

Saul Centers is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a real estate portfolio comprised of 58 properties which includes (a) 55 community and neighborhood shopping centers and mixed-use properties with approximately 9.2 million square feet of leasable area and (b) three land and development properties. Over 85% of the Company's property operating income is generated from properties in the metropolitan Washington, DC/Baltimore area.

Five Oaks Investment Company Profile

Five Oaks Investment Corp. focuses on investing, financing, and managing a portfolio of residential mortgage loans and mortgage-backed securities (MBS). It invests in agency and non-agency residential MBS, multi-family MBS, residential mortgage loans, mortgage servicing rights, and other mortgage-related investments. The company is qualified as a real estate investment trust (REIT) under the Internal Revenue Code. As a REIT, its net income would be exempt from federal taxation to the extent that it is distributed as dividends to shareholders. Five Oaks Investment Corp. was founded in 2012 and is headquartered in New York, New York.

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