Contrasting Clipper Realty (NYSE:CLPR) & Orchid Island Capital (NYSE:ORC)

Orchid Island Capital (NYSE:ORC) and Clipper Realty (NYSE:CLPR) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitability.

Dividends

Orchid Island Capital pays an annual dividend of $1.44 per share and has a dividend yield of 17.9%. Clipper Realty pays an annual dividend of $0.38 per share and has a dividend yield of 9.1%. Orchid Island Capital pays out 137.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Clipper Realty pays out -131.0% of its earnings in the form of a dividend.

Insider & Institutional Ownership

32.7% of Orchid Island Capital shares are owned by institutional investors. Comparatively, 37.6% of Clipper Realty shares are owned by institutional investors. 0.6% of Orchid Island Capital shares are owned by insiders. Comparatively, 50.8% of Clipper Realty shares are owned 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.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Orchid Island Capital and Clipper Realty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orchid Island Capital	0	1	1	0	2.50
Clipper Realty	1	1	0	0	1.50

Orchid Island Capital presently has a consensus target price of $9.50, indicating a potential upside of 18.38%. Given Orchid Island Capital’s stronger consensus rating and higher probable upside, equities analysts plainly believe Orchid Island Capital is more favorable than Clipper Realty.

Risk & Volatility

Orchid Island Capital has a beta of 1.82, suggesting that its share price is 82% more volatile than the S&P 500. Comparatively, Clipper Realty has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500.

Profitability

This table compares Orchid Island Capital and Clipper Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orchid Island Capital	N/A	-4.08%	-0.46%
Clipper Realty	-2.17%	-85.95%	-0.25%

Earnings and Valuation

This table compares Orchid Island Capital and Clipper Realty”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orchid Island Capital	$177.57 million	3.61	-$39.23 million	$1.05	7.64
Clipper Realty	$145.60 million	0.46	-$5.90 million	($0.29)	-14.41

Clipper Realty has lower revenue, but higher earnings than Orchid Island Capital. Clipper Realty is trading at a lower price-to-earnings ratio than Orchid Island Capital, indicating that it is currently the more affordable of the two stocks.

Summary

Orchid Island Capital beats Clipper Realty on 11 of the 16 factors compared between the two stocks.

About Orchid Island Capital

Orchid Island Capital, Inc., a specialty finance company, invests in residential mortgage-backed securities (RMBS) in the United States. The company’s RMBS is backed by single-family residential mortgage loans, referred as Agency RMBS. Its portfolio includes traditional pass-through Agency RMBS, such as mortgage pass through certificates and collateralized mortgage obligations; and structured Agency RMBS comprising interest only securities, inverse interest only securities, and principal only securities. The company has elected to be taxed as a real estate investment trust (REIT) for the United States federal income tax purposes. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to stockholders, if it annually distributes dividends equal to at least 90% of its REIT taxable income to its stockholders. Orchid Island Capital, Inc. was incorporated in 2010 and is headquartered in Vero Beach, Florida.

About Clipper Realty

Clipper Realty Inc. (NYSE: CLPR) is a self-administered and self-managed real estate company that acquires, owns, manages, operates, and repositions multifamily residential and commercial properties in the New York metropolitan area, with a portfolio in Manhattan and Brooklyn.