Head-To-Head Survey: Urban Edge Properties (UE) and Invesco Mortgage Capital (NYSE:IVR)

Urban Edge Properties (NYSE:UE) and Invesco Mortgage Capital (NYSE:IVR) are both mid-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

Urban Edge Properties has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Invesco Mortgage Capital has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Profitability

This table compares Urban Edge Properties and Invesco Mortgage Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Urban Edge Properties 25.39% 10.41% 3.74%
Invesco Mortgage Capital -9.79% 11.98% 1.23%

Earnings and Valuation

This table compares Urban Edge Properties and Invesco Mortgage Capital’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Urban Edge Properties $414.16 million 5.49 $105.15 million $1.31 14.46
Invesco Mortgage Capital $321.40 million 6.37 -$70.79 million N/A N/A

Urban Edge Properties has higher revenue and earnings than Invesco Mortgage Capital.

Analyst Recommendations

This is a breakdown of recent recommendations for Urban Edge Properties and Invesco Mortgage Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Urban Edge Properties 1 0 0 0 1.00
Invesco Mortgage Capital 0 2 0 0 2.00

Invesco Mortgage Capital has a consensus target price of $15.50, indicating a potential downside of 3.37%. Given Invesco Mortgage Capital’s stronger consensus rating and higher probable upside, analysts clearly believe Invesco Mortgage Capital is more favorable than Urban Edge Properties.

Institutional & Insider Ownership

83.6% of Urban Edge Properties shares are held by institutional investors. Comparatively, 58.7% of Invesco Mortgage Capital shares are held by institutional investors. 4.9% of Urban Edge Properties shares are held by insiders. Comparatively, 0.3% of Invesco Mortgage Capital 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.

Dividends

Urban Edge Properties pays an annual dividend of $0.88 per share and has a dividend yield of 4.6%. Invesco Mortgage Capital pays an annual dividend of $1.80 per share and has a dividend yield of 11.2%. Urban Edge Properties pays out 67.2% of its earnings in the form of a dividend. Invesco Mortgage Capital has increased its dividend for 2 consecutive years. Invesco Mortgage Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Urban Edge Properties beats Invesco Mortgage Capital on 8 of the 15 factors compared between the two stocks.

About Urban Edge Properties

Urban Edge Properties is a NYSE listed real estate investment trust focused on managing, acquiring, developing, and redeveloping retail real estate in urban communities, primarily in the New York metropolitan region. Urban Edge owns 88 properties totaling 16.3 million square feet of gross leasable area.

About Invesco Mortgage Capital

Invesco Mortgage Capital Inc. operates as a real estate investment trust (REIT) that focuses on investing in, financing, and managing residential and commercial mortgage-backed securities, and other mortgage-related assets. It invests in residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities (CMBS) that are guaranteed by a U.S. government agency or federally chartered corporation; RMBS and CMBS that are not issued or guaranteed by a U.S. government agency or federally chartered corporation; credit risk transfer securities that are unsecured obligations issued by government-sponsored enterprises; residential and commercial mortgage loans; and other real estate-related financing arrangements. Invesco Mortgage Capital Inc. has elected to be taxed as a REIT and 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 formally known as Invesco Agency Securities Inc. and changed its name to Invesco Mortgage Capital Inc. in June 2008. Invesco Mortgage Capital Inc. was incorporated in 2008 and is headquartered in Atlanta, Georgia.

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