Financial Contrast: Annaly Capital Management (NYSE:NLY) and Braemar Hotels & Resorts (NYSE:BHR)

Annaly Capital Management (NYSE:NLY) and Braemar Hotels & Resorts (NYSE:BHR) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, dividends, risk, profitability, institutional ownership and earnings.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Annaly Capital Management and Braemar Hotels & Resorts, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Annaly Capital Management	0	1	8	0	2.89
Braemar Hotels & Resorts	0	1	0	0	2.00

Annaly Capital Management currently has a consensus price target of $21.50, suggesting a potential upside of 14.79%. Braemar Hotels & Resorts has a consensus price target of $2.50, suggesting a potential downside of 19.87%. Given Annaly Capital Management’s stronger consensus rating and higher possible upside, equities analysts plainly believe Annaly Capital Management is more favorable than Braemar Hotels & Resorts.

Earnings and Valuation

This table compares Annaly Capital Management and Braemar Hotels & Resorts”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Annaly Capital Management	$320.33 million	32.78	-$1.64 billion	($0.07)	-267.57
Braemar Hotels & Resorts	$732.60 million	0.28	-$27.02 million	($0.77)	-4.05

Braemar Hotels & Resorts has higher revenue and earnings than Annaly Capital Management. Annaly Capital Management is trading at a lower price-to-earnings ratio than Braemar Hotels & Resorts, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Annaly Capital Management and Braemar Hotels & Resorts’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Annaly Capital Management	2.59%	14.75%	1.57%
Braemar Hotels & Resorts	-0.30%	-0.78%	-0.10%

Risk & Volatility

Annaly Capital Management has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500. Comparatively, Braemar Hotels & Resorts has a beta of 2.05, meaning that its stock price is 105% more volatile than the S&P 500.

Dividends

Annaly Capital Management pays an annual dividend of $2.60 per share and has a dividend yield of 13.9%. Braemar Hotels & Resorts pays an annual dividend of $0.20 per share and has a dividend yield of 6.4%. Annaly Capital Management pays out -3,714.3% of its earnings in the form of a dividend. Braemar Hotels & Resorts pays out -26.0% 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. Annaly Capital Management is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

51.6% of Annaly Capital Management shares are held by institutional investors. Comparatively, 64.8% of Braemar Hotels & Resorts shares are held by institutional investors. 0.2% of Annaly Capital Management shares are held by company insiders. Comparatively, 1.8% of Braemar Hotels & Resorts shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Annaly Capital Management beats Braemar Hotels & Resorts on 10 of the 16 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 Braemar Hotels & Resorts

Braemar Hotels & Resorts is a conservatively capitalized REIT that invests primarily in high RevPAR, full-service luxury hotels and resorts. We are listed on the New York Stock Exchange under the symbol BHR and are externally-advised by Ashford (NYSE American: AINC).