Critical Comparison: Flagstar Bank, National Association (NYSE:FLG) & Fannie Mae (OTCMKTS:FNMA)

Fannie Mae (OTCMKTS:FNMA) and Flagstar Bank, National Association (NYSE:FLG) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Profitability

This table compares Fannie Mae and Flagstar Bank, National Association’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fannie Mae	4.59%	-76.66%	0.51%
Flagstar Bank, National Association	1.08%	0.98%	0.08%

Volatility & Risk

Fannie Mae has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500. Comparatively, Flagstar Bank, National Association has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Fannie Mae and Flagstar Bank, National Association, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fannie Mae	1	4	0	1	2.17
Flagstar Bank, National Association	1	3	10	0	2.64

Fannie Mae currently has a consensus price target of $10.70, indicating a potential upside of 129.12%. Flagstar Bank, National Association has a consensus price target of $16.96, indicating a potential upside of 36.97%. Given Fannie Mae’s higher possible upside, equities analysts plainly believe Fannie Mae is more favorable than Flagstar Bank, National Association.

Institutional and Insider Ownership

0.0% of Fannie Mae shares are owned by institutional investors. Comparatively, 67.9% of Flagstar Bank, National Association shares are owned by institutional investors. 1.0% of Fannie Mae shares are owned by insiders. Comparatively, 21.4% of Flagstar Bank, National Association shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Fannie Mae and Flagstar Bank, National Association”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fannie Mae	$159.17 billion	0.03	$14.36 billion	$0.04	116.75
Flagstar Bank, National Association	$4.81 billion	1.07	-$177.00 million	$0.03	412.70

Fannie Mae has higher revenue and earnings than Flagstar Bank, National Association. Fannie Mae is trading at a lower price-to-earnings ratio than Flagstar Bank, National Association, indicating that it is currently the more affordable of the two stocks.

Summary

Fannie Mae beats Flagstar Bank, National Association on 8 of the 15 factors compared between the two stocks.

About Fannie Mae

Federal National Mortgage Association provides financing solutions for mortgages in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment securitizes and purchases single-family fixed-rate or adjustable-rate, first-lien mortgage loans, or mortgage-related securities backed by these loans; and loans that are insured by Federal Housing Administration, loans guaranteed by the Department of Veterans Affairs and Rural Development Housing and Community Facilities Program of the U.S. Department of Agriculture, manufactured housing mortgage loans, and other mortgage-related securities. The Multifamily segment securitizes multifamily mortgage loans into Fannie Mae mortgage backed securities (MBS); purchases multifamily mortgage loans; and provides credit enhancement for bonds issued by state and local housing finance authorities to finance multifamily housing. This segment also issues structured MBS backed by Fannie Mae multifamily MBS; buys and sells multifamily agency mortgage-backed securities; and invests in low-income housing tax credit multifamily projects. Federal National Mortgage Association was founded in 1938 and is based in Washington, the District of Columbia.

About Flagstar Bank, National Association

Flagstar Financial, Inc. operates as the bank holding company for Flagstar Bank, N.A. that provides banking products and services in the United States. The company’s deposit products include interest-bearing checking and money market, savings, non-interest-bearing, and retirement accounts, as well as certificates of deposit. Its loan products comprise multi-family loans; commercial real estate loans; acquisition, development, and construction loans; commercial and industrial loans; one-to-four family loans; specialty finance loans and leases; warehouse loans; and other loans, such as home equity lines of credit, boat and recreational vehicle indirect lending, point of sale consumer loans, and other consumer loans, including overdraft loans. The company offers cash management products; non-deposit investment and insurance products; and online banking, mobile banking, and bank-by-phone services. It primarily serves individuals, small and mid-size businesses, and professional associations. The company was formerly known as New York Community Bancorp, Inc. and changed its name to Flagstar Financial, Inc. in October 2024. Flagstar Financial, Inc. was founded in 1859 and is headquartered in Hicksville, New York.