Head-To-Head Review: Dynex Capital (NYSE:DX) & CubeSmart (NYSE:CUBE)

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CubeSmart	$1.07 billion	8.04	$410.76 million	$1.72	21.88
Dynex Capital	$150.40 million	7.28	$113.90 million	$1.47	7.74

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

Dividends

CubeSmart pays an annual dividend of $2.08 per share and has a dividend yield of 5.5%. Dynex Capital pays an annual dividend of $2.04 per share and has a dividend yield of 17.9%. CubeSmart pays out 120.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dynex Capital pays out 138.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CubeSmart has raised its dividend for 16 consecutive years.

Institutional & Insider Ownership

97.6% of CubeSmart shares are held by institutional investors. Comparatively, 38.3% of Dynex Capital shares are held by institutional investors. 1.7% of CubeSmart shares are held by insiders. Comparatively, 2.5% of Dynex Capital shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for CubeSmart and Dynex Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CubeSmart	0	9	4	0	2.31
Dynex Capital	0	1	3	0	2.75

CubeSmart presently has a consensus target price of $47.31, suggesting a potential upside of 25.70%. Dynex Capital has a consensus target price of $13.33, suggesting a potential upside of 17.11%. Given CubeSmart’s higher possible upside, analysts clearly believe CubeSmart is more favorable than Dynex Capital.

Volatility & Risk

CubeSmart has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, Dynex Capital has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CubeSmart	37.79%	14.33%	6.48%
Dynex Capital	35.65%	-2.24%	-0.30%

Summary

CubeSmart beats Dynex Capital on 13 of the 17 factors compared between the two stocks.

About CubeSmart

CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and, in most locations, climate-controlled storage space for residential and commercial customers. According to the 2023 Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.

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.