Uniti Group (UNIT) and New Residential Investment (NRZ) Financial Contrast

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Uniti Group (NYSE: NRZ) and New Residential Investment (NYSE:NRZ) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, earnings, profitability and institutional ownership.

Dividends

Uniti Group pays an annual dividend of $2.40 per share and has a dividend yield of 12.0%. New Residential Investment pays an annual dividend of $2.00 per share and has a dividend yield of 10.7%. Uniti Group pays out 95.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. New Residential Investment pays out 70.7% of its earnings in the form of a dividend. New Residential Investment has raised its dividend for 4 consecutive years.

Risk and Volatility

Uniti Group has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, New Residential Investment has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Institutional and Insider Ownership

71.4% of Uniti Group shares are held by institutional investors. Comparatively, 52.5% of New Residential Investment shares are held by institutional investors. 0.4% of Uniti Group shares are held by insiders. Comparatively, 0.9% of New Residential Investment shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Uniti Group and New Residential Investment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Uniti Group 1.83% -1.45% 0.41%
New Residential Investment 83.31% 14.85% 3.53%

Earnings & Valuation

This table compares Uniti Group and New Residential Investment’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Uniti Group $916.03 million 3.85 -$9.43 million $2.51 7.99
New Residential Investment $1.52 billion 4.18 $957.53 million $2.83 6.60

New Residential Investment has higher revenue and earnings than Uniti Group. New Residential Investment is trading at a lower price-to-earnings ratio than Uniti Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Uniti Group and New Residential Investment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Uniti Group 1 3 2 0 2.17
New Residential Investment 0 0 5 0 3.00

Uniti Group presently has a consensus target price of $25.80, suggesting a potential upside of 28.68%. New Residential Investment has a consensus target price of $19.45, suggesting a potential upside of 4.12%. Given Uniti Group’s higher probable upside, research analysts clearly believe Uniti Group is more favorable than New Residential Investment.

Summary

New Residential Investment beats Uniti Group on 13 of the 17 factors compared between the two stocks.

About Uniti Group

Uniti, an internally managed real estate investment trust, is engaged in the acquisition and construction of mission critical communications infrastructure, and is a leading provider of wireless infrastructure solutions for the communications industry. As of June 30, 2018, Uniti owns 5.4 million fiber strand miles, approximately 770 wireless towers, and other communications real estate throughout the United States and Latin America.

About New Residential Investment

New Residential Investment Corp., a real estate investment trust, focuses on investing in and managing residential mortgage related assets in the United States. It operates through Servicing Related Assets, Residential Securities and Loans, and Other Investments segments. The company invests in excess mortgage servicing rights (MSRs) on residential mortgage loans; and in servicer advances, including the basic fee component of the related MSRs. It also invests in real estate securities, residential mortgage loans, investments in consumer loans, and corporate. In addition, the company has an interest in a portfolio of consumer loans, including unsecured and homeowner loans. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2011 and is based in New York, New York.

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