Financial Analysis: Orchid Island Capital (NYSE:ORC) Vs. Mid-America Apartment Communities (NYSE:MAA)

Orchid Island Capital (NYSE:ORC – Get Free Report) and Mid-America Apartment Communities (NYSE:MAA – Get Free Report) are both finance companies, but which is the superior stock? We’ll compare the two businesses based on dividend strength, risk, analyst recommendations, profitability, institutional ownership, earnings and valuation.

Analyst recommendations

This is a summary of recent ratings and price targets for Orchid Island Capital and Mid-America Apartment Communities as provided by MarketBeat.

Orchid Island Capital currently has a consensus price target of $9.50, indicating a potential upside of 21.33%. Mid-America Apartment Communities has a consensus target price of $159.91, indicating a potential upside of 3.42%. Given Orchid Island Capital’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Orchid Island Capital is more favorable than Mid-America Apartment Communities.

Insider and institutional ownership

32.7% of Orchid Island Capital shares are owned by institutional investors. Comparatively, 93.6% of Mid-America Apartment Communities shares are held by institutional investors. 0.6% of Orchid Island Capital shares are held by insiders. Comparatively, 1.3% of Mid-America Apartment Communities shares are held by insiders. Strong institutional ownership is an indication that endowments, big money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Rating

This table compares the revenue, earnings per share and valuation of Orchid Island Capital and Mid-America Apartment Communities.

Mid-America Apartment Communities has higher revenue and earnings than Orchid Island Capital. Orchid Island Capital is trading at a lower price-to-earnings ratio than Mid-America Apartment Communities, indicating that it is currently the more affordable of the two stocks.

dividends

Orchid Island Capital pays an annual dividend of $1.44 per share and has a dividend yield of 18.4%. Mid-America Apartment Communities pays an annual dividend of $5.88 per share and has a dividend yield of 3.8%. Orchid Island Capital pays out -271.7% of earnings as a dividend. Mid-America Apartment Communities pays out 123.3% of its earnings in dividends, suggesting that it may not have enough earnings to cover its dividend payout in the future. Mid-America Apartment Communities has increased its dividend for 15 consecutive years. Orchid Island Capital is clearly the better dividend stock given its higher yield and lower payout ratio.

Volatility and risk

Orchid Island Capital has a beta of 1.85, indicating that its share price is 85% more volatile than the S&P 500. Comparatively, Mid-America Apartment Communities has a beta of 0.88, indicating that that its share price is 12% less volatile than the S&P. 500.

return

This table compares Orchid Island Capital and Mid-America Apartment Communities’ net margins, return on equity and return on assets.

Summary

Mid-America Apartment Communities beats Orchid Island Capital in 12 of the 17 factors compared between the two stocks.

About Orchid Island Capital

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

About Mid-America Apartment Communities

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MAA, an S&P 500 company, is a real estate investment trust (REIT) focused on providing superior, full-cycle investment performance for shareholders by owning, managing, acquiring, developing and redeveloping quality apartment communities, primarily in the South eastern, southwestern, and Mid-Atlantic Regions of the United States. As of December 31, 2023, MAA owned interests in 102,662 apartment units, including developing communities, in 16 states and the District of Columbia.

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