Critical Contrast: Equinix (NASDAQ:EQIX) versus Orchid Island Capital (NYSE:ORC)

Orchid Island Capital (NYSE:ORC) and Equinix (NASDAQ:EQIX) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Profitability

This table compares Orchid Island Capital and Equinix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orchid Island Capital	N/A	-6.36%	-0.68%
Equinix	12.24%	8.46%	3.21%

Valuation & Earnings

This table compares Orchid Island Capital and Equinix’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orchid Island Capital	$177.57 million	3.29	-$39.23 million	($0.53)	-15.45
Equinix	$8.19 billion	9.64	$969.18 million	$9.97	83.43

Equinix has higher revenue and earnings than Orchid Island Capital. Orchid Island Capital is trading at a lower price-to-earnings ratio than Equinix, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

32.7% of Orchid Island Capital shares are owned by institutional investors. Comparatively, 94.9% of Equinix shares are owned by institutional investors. 0.6% of Orchid Island Capital shares are owned by company insiders. Comparatively, 0.3% of Equinix shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Orchid Island Capital pays an annual dividend of $1.44 per share and has a dividend yield of 17.6%. Equinix pays an annual dividend of $17.04 per share and has a dividend yield of 2.0%. Orchid Island Capital pays out -271.7% of its earnings in the form of a dividend. Equinix pays out 170.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Orchid Island Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings and target prices for Orchid Island Capital and Equinix, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orchid Island Capital	0	1	1	0	2.50
Equinix	0	5	11	0	2.69

Orchid Island Capital currently has a consensus price target of $9.50, suggesting a potential upside of 16.00%. Equinix has a consensus price target of $876.71, suggesting a potential upside of 5.40%. Given Orchid Island Capital’s higher possible upside, equities analysts plainly believe Orchid Island Capital is more favorable than Equinix.

Volatility & Risk

Orchid Island Capital has a beta of 1.85, indicating that its share price is 85% more volatile than the S&P 500. Comparatively, Equinix has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500.

Summary

Equinix beats Orchid Island Capital on 11 of the 16 factors compared between the two stocks.

About Orchid Island Capital

Orchid Island Capital, Inc., a specialty finance company, invests in residential mortgage-backed securities (RMBS) in the United States. The company's RMBS is backed by single-family residential mortgage loans, referred as Agency RMBS. Its portfolio includes traditional pass-through Agency RMBS, such as mortgage pass through certificates and collateralized mortgage obligations; and structured Agency RMBS comprising interest only securities, inverse interest only securities, and principal only securities. The company has elected to be taxed as a real estate investment trust (REIT) for the United States federal income tax purposes. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to stockholders, if it annually distributes dividends equal to at least 90% of its REIT taxable income to its stockholders. Orchid Island Capital, Inc. was incorporated in 2010 and is headquartered in Vero Beach, Florida.

About Equinix

Equinix (Nasdaq: EQIX) is the world's digital infrastructure company . Digital leaders harness Equinix's trusted platform to bring together and interconnect foundational infrastructure at software speed. Equinix enables organizations to access all the right places, partners and possibilities to scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value, while supporting their sustainability goals.