Analyzing Federal Agricultural Mortgage (NYSE:AGM) and Onity Group (NYSE:ONIT)

Federal Agricultural Mortgage (NYSE:AGM) and Onity Group (NYSE:ONIT) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Profitability

This table compares Federal Agricultural Mortgage and Onity Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Federal Agricultural Mortgage	13.14%	18.86%	0.65%
Onity Group	3.74%	18.99%	0.56%

Risk and Volatility

Federal Agricultural Mortgage has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, Onity Group has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500.

Institutional & Insider Ownership

68.0% of Federal Agricultural Mortgage shares are owned by institutional investors. Comparatively, 70.2% of Onity Group shares are owned by institutional investors. 2.2% of Federal Agricultural Mortgage shares are owned by insiders. Comparatively, 7.6% of Onity Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Federal Agricultural Mortgage and Onity Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Federal Agricultural Mortgage	$1.62 billion	1.10	$207.19 million	$16.98	9.59
Onity Group	$976.00 million	0.31	$33.90 million	$3.92	9.66

Federal Agricultural Mortgage has higher revenue and earnings than Onity Group. Federal Agricultural Mortgage is trading at a lower price-to-earnings ratio than Onity Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for Federal Agricultural Mortgage and Onity Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Federal Agricultural Mortgage	0	2	0	0	2.00
Onity Group	1	1	3	0	2.40

Federal Agricultural Mortgage presently has a consensus price target of $217.00, suggesting a potential upside of 33.29%. Onity Group has a consensus price target of $50.00, suggesting a potential upside of 32.03%. Given Federal Agricultural Mortgage’s higher possible upside, equities research analysts clearly believe Federal Agricultural Mortgage is more favorable than Onity Group.

About Federal Agricultural Mortgage

Federal Agricultural Mortgage Corporation provides a secondary market for various loans made to borrowers in the United States. It operates through four segments: Corporate AgFinance, Farm & Ranch, Rural Utilities, and Renewable Energy. The company’s Agricultural Finance line of business engages in purchasing and retaining eligible loans and securities; guaranteeing the payment of principal and interest on securities that represent interests in or obligations secured by pools of eligible loans; servicing eligible loans; and issuing LTSPCs for eligible loans. Its Rural Infrastructure Finance line of business is involved in the purchase of rural utilities loans and renewable energy loans and guarantees of securities backed by loans, as well as LTSPCs for pools of eligible rural utilities loans; by loans for electric or telecommunications facilities by lenders organized as cooperatives to borrowers; and other financial institutions that are secured by pools of eligible loans. Federal Agricultural Mortgage Corporation was incorporated in 1987 and is headquartered in Washington, the District of Columbia.

About Onity Group

Onity Group Inc., a financial services company, originates and services mortgage loans in the United States, the United States Virgin Islands, India, and the Philippines. It operates through, Servicing and Originations segments. The company provides commercial forward mortgage loan servicing, reverse mortgage servicing, special servicing, and asset management services for to owners of mortgage loans and foreclosed real estate, as well as residential mortgage loan servicing, such as forward and reverse conventional, government-insured, and non-agency loans, including the reverse mortgage loans classified as loans. It also originates and purchases conventional and government-insured residential forward and reverse mortgage loans through its correspondent lending arrangements, broker relationships, and retail channels. It serves primarily under the PHH Mortgage and Liberty Reverse Mortgage brands. The company was formerly known as Ocwen Financial Corporation and changed its name to Onity Group Inc. in June 2024. Onity Group Inc. was founded in 1988 and is headquartered in West Palm Beach, Florida.