MFA Financial (NYSE:MFA) and BrightSpire Capital (NYSE:BRSP) Head-To-Head Contrast

MFA Financial (NYSE:MFA) and BrightSpire Capital (NYSE:BRSP) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Dividends

MFA Financial pays an annual dividend of $1.44 per share and has a dividend yield of 13.3%. BrightSpire Capital pays an annual dividend of $0.64 per share and has a dividend yield of 11.0%. MFA Financial pays out 177.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BrightSpire Capital pays out -61.0% of its earnings in the form of a dividend.

Insider and Institutional Ownership

65.3% of MFA Financial shares are owned by institutional investors. Comparatively, 56.6% of BrightSpire Capital shares are owned by institutional investors. 0.7% of MFA Financial shares are owned by company insiders. Comparatively, 1.9% of BrightSpire Capital shares are owned 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.

Valuation & Earnings

This table compares MFA Financial and BrightSpire Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MFA Financial	$252.85 million	4.39	$80.16 million	$0.81	13.37
BrightSpire Capital	$347.22 million	2.18	-$15.55 million	($1.05)	-5.56

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

Analyst Recommendations

This is a summary of recent ratings and target prices for MFA Financial and BrightSpire Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MFA Financial	0	0	5	0	3.00
BrightSpire Capital	0	3	3	0	2.50

MFA Financial presently has a consensus price target of $13.70, indicating a potential upside of 26.50%. BrightSpire Capital has a consensus price target of $7.69, indicating a potential upside of 31.64%. Given BrightSpire Capital’s higher possible upside, analysts clearly believe BrightSpire Capital is more favorable than MFA Financial.

Profitability

This table compares MFA Financial and BrightSpire Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MFA Financial	16.47%	9.61%	1.64%
BrightSpire Capital	-79.23%	8.82%	2.55%

Volatility and Risk

MFA Financial has a beta of 2.18, meaning that its stock price is 118% more volatile than the S&P 500. Comparatively, BrightSpire Capital has a beta of 1.98, meaning that its stock price is 98% more volatile than the S&P 500.

Summary

MFA Financial beats BrightSpire Capital on 11 of the 16 factors compared between the two stocks.

About MFA Financial

MFA Financial, Inc., together with its subsidiaries, operates as a real estate investment trust in the United States. It invests in residential mortgage securities, including non-agency mortgage-backed securities, agency MBS, and credit risk transfer securities; residential whole loans, including purchased performing loans, purchased credit deteriorated, and non-performing loans; and mortgage servicing rights related assets. The company was incorporated in 1997 and is based in New York, New York.

About BrightSpire Capital

BrightSpire Capital, Inc. operates as a commercial real estate (CRE) credit real estate investment trust in the United States and Europe. The company operates through Senior and Mezzanine Loans and Preferred Equity; Net Leased and Other Real Estate; and Corporate and Other segments. It focuses on originating, acquiring, financing, and managing a diversified portfolio of CRE debt investments consisting of first mortgage loans, senior loans, debt securities, mezzanine loans, and preferred equity investments, as well as net leased properties. 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 formerly known as Colony Credit Real Estate, Inc. and changed its name to BrightSpire Capital, Inc. in June 2021. BrightSpire Capital, Inc. was incorporated in 2017 and is headquartered in New York, New York.