Head-To-Head Survey: Jernigan Capital (JCAP) and ARMOUR Residential REIT (ARR)

Jernigan Capital (NYSE:JCAP) and ARMOUR Residential REIT (NYSE:ARR) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Risk & Volatility

Jernigan Capital has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, ARMOUR Residential REIT has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500.

Earnings and Valuation

This table compares Jernigan Capital and ARMOUR Residential REIT’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Jernigan Capital $31.21 million 13.74 $54.37 million $2.08 10.06
ARMOUR Residential REIT $283.15 million 4.16 -$105.96 million $2.50 7.88

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

Dividends

Jernigan Capital pays an annual dividend of $1.40 per share and has a dividend yield of 6.7%. ARMOUR Residential REIT pays an annual dividend of $2.28 per share and has a dividend yield of 11.6%. Jernigan Capital pays out 67.3% of its earnings in the form of a dividend. ARMOUR Residential REIT pays out 91.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

72.1% of Jernigan Capital shares are held by institutional investors. Comparatively, 44.0% of ARMOUR Residential REIT shares are held by institutional investors. 1.9% of Jernigan Capital shares are held by insiders. Comparatively, 1.6% of ARMOUR Residential REIT shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Jernigan Capital and ARMOUR Residential REIT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Jernigan Capital 174.17% 18.83% 12.33%
ARMOUR Residential REIT -37.42% 10.59% 1.50%

Analyst Recommendations

This is a breakdown of recent recommendations for Jernigan Capital and ARMOUR Residential REIT, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jernigan Capital 0 0 4 0 3.00
ARMOUR Residential REIT 1 1 0 0 1.50

Jernigan Capital presently has a consensus target price of $24.00, indicating a potential upside of 14.72%. ARMOUR Residential REIT has a consensus target price of $19.50, indicating a potential downside of 1.07%. Given Jernigan Capital’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Jernigan Capital is more favorable than ARMOUR Residential REIT.

Summary

Jernigan Capital beats ARMOUR Residential REIT on 12 of the 16 factors compared between the two stocks.

About Jernigan Capital

Jernigan Capital, Inc. is a New York Stock Exchange-listed real estate investment trust (NYSE: JCAP) that provides debt and equity capital to private developers, owners, and operators of self-storage facilities. Our mission is to be the preeminent capital partner for self-storage entrepreneurs nationwide by offering creative solutions through an experienced team demonstrating the highest levels of integrity, dedication, excellence and community, while maximizing shareholder value. The Jernigan Capital team has extensive experience in over 100 U.S. markets—from acquiring and managing self-storage properties to new self-storage development—providing JCAP with knowledge unmatched by any lender, broker or advisor to the sector. Jernigan Capital is the only source of construction and development capital focused solely on the self-storage sector.

About ARMOUR Residential REIT

ARMOUR Residential REIT, Inc. invests in residential mortgage backed securities in the United States. The company is managed by ARMOUR Capital Management LP. Its securities portfolio primarily consists of the United States Government-sponsored entity's (GSE) and the Government National Mortgage Administration's issued or guaranteed securities backed by fixed rate, hybrid adjustable rate, and adjustable rate home loans, as well as unsecured notes and bonds issued by the GSE and the United States treasuries; and money market instruments. The company also invests in other securities backed by residential mortgages for which the payment of principal and interest is not guaranteed by a GSE or government agency. ARMOUR Residential REIT, Inc. has elected to be taxed as a real estate investment trust under the Internal Revenue Code. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was founded in 2008 and is based in Vero Beach, Florida.

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