Head to Head Survey: MFA Financial (NYSE:MFA) & Clipper Realty (NYSE:CLPR)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Clipper Realty	-2.54%	-85.95%	-0.29%
MFA Financial	14.22%	10.02%	1.76%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Clipper Realty and MFA Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Clipper Realty	1	1	0	0	1.50
MFA Financial	0	1	4	0	2.80

MFA Financial has a consensus target price of $13.00, suggesting a potential downside of 0.84%. Given MFA Financial’s stronger consensus rating and higher possible upside, analysts clearly believe MFA Financial is more favorable than Clipper Realty.

Risk and Volatility

Clipper Realty has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500. Comparatively, MFA Financial has a beta of 2.16, meaning that its stock price is 116% more volatile than the S&P 500.

Institutional and Insider Ownership

37.6% of Clipper Realty shares are owned by institutional investors. Comparatively, 65.3% of MFA Financial shares are owned by institutional investors. 52.3% of Clipper Realty shares are owned by insiders. Comparatively, 0.7% of MFA Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Clipper Realty pays an annual dividend of $0.38 per share and has a dividend yield of 7.1%. MFA Financial pays an annual dividend of $1.40 per share and has a dividend yield of 10.7%. Clipper Realty pays out -108.6% of its earnings in the form of a dividend. MFA Financial pays out -1,750.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. MFA Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Clipper Realty and MFA Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Clipper Realty	$143.10 million	0.60	-$5.90 million	($0.35)	-15.23
MFA Financial	$229.72 million	5.83	$80.16 million	($0.08)	-163.88

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

Summary

MFA Financial beats Clipper Realty on 14 of the 16 factors compared between the two stocks.

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.

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.