Financial Analysis: Dynex Capital (NYSE:DX) versus EPR Properties (NYSE:EPR)

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

Risk and Volatility

Dynex Capital has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500. Comparatively, EPR Properties has a beta of 1.76, meaning that its stock price is 76% more volatile than the S&P 500.

Institutional & Insider Ownership

38.3% of Dynex Capital shares are owned by institutional investors. Comparatively, 74.7% of EPR Properties shares are owned by institutional investors. 2.5% of Dynex Capital shares are owned by insiders. Comparatively, 2.1% of EPR Properties shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Dynex Capital pays an annual dividend of $1.56 per share and has a dividend yield of 12.6%. EPR Properties pays an annual dividend of $3.42 per share and has a dividend yield of 7.6%. Dynex Capital pays out 123.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EPR Properties pays out 148.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dynex Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Dynex Capital and EPR Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dynex Capital	0	2	4	0	2.67
EPR Properties	2	4	3	1	2.30

Dynex Capital currently has a consensus price target of $13.35, suggesting a potential upside of 7.79%. EPR Properties has a consensus price target of $48.28, suggesting a potential upside of 7.30%. Given Dynex Capital’s stronger consensus rating and higher probable upside, analysts clearly believe Dynex Capital is more favorable than EPR Properties.

Profitability

This table compares Dynex Capital and EPR Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dynex Capital	28.83%	-4.80%	-0.63%
EPR Properties	28.87%	8.22%	3.52%

Valuation and Earnings

This table compares Dynex Capital and EPR Properties”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dynex Capital	$207.52 million	4.73	-$6.13 million	$1.26	9.83
EPR Properties	$705.67 million	4.83	$173.05 million	$2.31	19.48

EPR Properties has higher revenue and earnings than Dynex Capital. Dynex Capital is trading at a lower price-to-earnings ratio than EPR Properties, indicating that it is currently the more affordable of the two stocks.

Summary

EPR Properties beats Dynex Capital on 11 of the 17 factors compared between the two stocks.

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.

About EPR Properties

EPR Properties (NYSE:EPR) is the leading diversified experiential net lease real estate investment trust (REIT), specializing in select enduring experiential properties in the real estate industry. We focus on real estate venues that create value by facilitating out of home leisure and recreation experiences where consumers choose to spend their discretionary time and money. We have total assets of approximately $5.7 billion (after accumulated depreciation of approximately $1.4 billion) across 44 states. We adhere to rigorous underwriting and investing criteria centered on key industry, property and tenant level cash flow standards. We believe our focused approach provides a competitive advantage and the potential for stable and attractive returns.