Financial Contrast: Freddie Mac (FMCC) and Its Peers

Freddie Mac (OTCMKTS:FMCC) is one of 920 public companies in the “Banks” industry, but how does it contrast to its rivals? We will compare Freddie Mac to related companies based on the strength of its earnings, risk, valuation, institutional ownership, dividends, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Freddie Mac and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freddie Mac	1	3	1	0	2.00
Freddie Mac Competitors	7449	30129	27677	1445	2.35

Freddie Mac presently has a consensus target price of $8.38, indicating a potential upside of 102.78%. As a group, “Banks” companies have a potential upside of 14.91%. Given Freddie Mac’s higher probable upside, equities research analysts clearly believe Freddie Mac is more favorable than its rivals.

Risk and Volatility

Freddie Mac has a beta of 1.74, suggesting that its stock price is 74% more volatile than the S&P 500. Comparatively, Freddie Mac’s rivals have a beta of 0.60, suggesting that their average stock price is 40% less volatile than the S&P 500.

Profitability

This table compares Freddie Mac and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freddie Mac	9.58%	-90.29%	0.37%
Freddie Mac Competitors	15.48%	9.50%	0.93%

Insider & Institutional Ownership

47.9% of shares of all “Banks” companies are owned by institutional investors. 0.1% of Freddie Mac shares are owned by company insiders. Comparatively, 9.8% of shares of all “Banks” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Freddie Mac and its rivals gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Freddie Mac	$129.82 billion	$10.73 billion	413.00
Freddie Mac Competitors	$37.86 billion	$2.41 billion	19.02

Freddie Mac has higher revenue and earnings than its rivals. Freddie Mac is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Summary

Freddie Mac rivals beat Freddie Mac on 8 of the 13 factors compared.

Freddie Mac Company Profile

Federal Home Loan Mortgage Corporation operates in the secondary mortgage market in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment purchases, securitizes, and guarantees single-family loans; and manages single-family mortgage credit and market risk, as well as manages mortgage-related investments portfolio, single-family securitization activities, and treasury functions. This segment serves mortgage banking companies, commercial banks, regional banks, community banks, credit unions, housing finance agencies, savings institutions, and non-depository financial institutions. The Multifamily segment engages in the purchase, securitization, and guarantee of multifamily loans; issuance of multifamily K certificates; manages multifamily mortgage credit and market risk; and invests in multifamily loans and mortgage-related securities. It serves banks and other financial institutions, insurance companies, money managers, hedge funds, pension funds, state and local governments, and broker dealers. Federal Home Loan Mortgage Corporation incorporated in 1970 and is headquartered in McLean, Virginia.