AGNC Investment (NASDAQ:AGNC) and TPG RE Finance Trust (NYSE:TRTX) Critical Contrast

AGNC Investment (NASDAQ:AGNC) and TPG RE Finance Trust (NYSE:TRTX) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, risk, profitability and valuation.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for AGNC Investment and TPG RE Finance Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AGNC Investment	0	7	4	0	2.36
TPG RE Finance Trust	0	1	5	0	2.83

AGNC Investment currently has a consensus price target of $11.11, suggesting a potential upside of 2.03%. TPG RE Finance Trust has a consensus price target of $10.00, suggesting a potential upside of 26.90%. Given TPG RE Finance Trust’s stronger consensus rating and higher possible upside, analysts plainly believe TPG RE Finance Trust is more favorable than AGNC Investment.

Insider and Institutional Ownership

38.3% of AGNC Investment shares are held by institutional investors. Comparatively, 57.1% of TPG RE Finance Trust shares are held by institutional investors. 0.4% of AGNC Investment shares are held by insiders. Comparatively, 3.0% of TPG RE Finance Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

AGNC Investment has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500. Comparatively, TPG RE Finance Trust has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500.

Profitability

This table compares AGNC Investment and TPG RE Finance Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AGNC Investment	57.94%	17.96%	1.57%
TPG RE Finance Trust	17.03%	6.85%	1.66%

Dividends

AGNC Investment pays an annual dividend of $1.44 per share and has a dividend yield of 13.2%. TPG RE Finance Trust pays an annual dividend of $0.96 per share and has a dividend yield of 12.2%. AGNC Investment pays out 75.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TPG RE Finance Trust pays out 177.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AGNC Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares AGNC Investment and TPG RE Finance Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AGNC Investment	$3.52 billion	3.66	$1.67 billion	$1.90	5.73
TPG RE Finance Trust	$332.58 million	1.82	$60.32 million	$0.54	14.59

AGNC Investment has higher revenue and earnings than TPG RE Finance Trust. AGNC Investment is trading at a lower price-to-earnings ratio than TPG RE Finance Trust, indicating that it is currently the more affordable of the two stocks.

About AGNC Investment

AGNC Investment Corp., formerly American Capital Agency Corp., is a real estate investment trust. The Company invests in agency residential mortgage-backed securities on a leveraged basis. Its investments consist of residential mortgage pass-through securities and collateralized mortgage obligations (CMOs) for which the principal and interest payments are guaranteed by a government-sponsored enterprise, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), or by the United States Government agency, such as the Government National Mortgage Association (Ginnie Mae) (collectively, GSEs). Its agency securities include agency residential mortgage-backed securities (Agency RMBS) and to-be-announced forward contracts (TBAs). Its Non-Agency Securities include credit risk transfer securities (CRT), non-agency residential mortgage-backed securities (Non-Agency RMBS) and commercial mortgage-backed securities (CMBS).

About TPG RE Finance Trust

TPG RE Finance Trust, Inc., a commercial real estate finance company, originates, acquires, and manages commercial mortgage loans and other commercial real estate-related debt instruments in the United States. It invests in commercial mortgage loans; subordinate mortgage interests, mezzanine loans, secured real estate securities, note financing, preferred equity, and miscellaneous debt instruments; and commercial real estate collateralized loan obligations and commercial mortgage-backed securities secured by properties primarily in the multifamily, life science, mixed-use, hospitality, self storage, industrial, and retail real estate sectors. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. TPG RE Finance Trust, Inc. was incorporated in 2014 and is based in New York, New York.