Head-To-Head Contrast: DiamondRock Hospitality (NYSE:DRH) versus AGNC Investment (NASDAQ:AGNC)

AGNC Investment (NASDAQ:AGNC) and DiamondRock Hospitality (NYSE:DRH) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, risk, profitability, dividends and earnings.

Risk & Volatility

AGNC Investment has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500. Comparatively, DiamondRock Hospitality has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500.

Valuation and Earnings

This table compares AGNC Investment and DiamondRock Hospitality”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AGNC Investment	$514.00 million	14.64	$155.00 million	$0.91	11.37
DiamondRock Hospitality	$1.07 billion	1.64	$86.34 million	$0.36	23.67

AGNC Investment has higher earnings, but lower revenue than DiamondRock Hospitality. AGNC Investment is trading at a lower price-to-earnings ratio than DiamondRock Hospitality, indicating that it is currently the more affordable of the two stocks.

Dividends

AGNC Investment pays an annual dividend of $1.44 per share and has a dividend yield of 13.9%. DiamondRock Hospitality pays an annual dividend of $0.12 per share and has a dividend yield of 1.4%. AGNC Investment pays out 158.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DiamondRock Hospitality pays out 33.3% of its earnings in the form of a dividend.

Profitability

This table compares AGNC Investment and DiamondRock Hospitality’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AGNC Investment	16.15%	26.21%	2.36%
DiamondRock Hospitality	6.43%	4.31%	2.19%

Institutional & Insider Ownership

38.3% of AGNC Investment shares are owned by institutional investors. 0.5% of AGNC Investment shares are owned by company insiders. Comparatively, 1.4% of DiamondRock Hospitality shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for AGNC Investment and DiamondRock Hospitality, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AGNC Investment	0	4	6	0	2.60
DiamondRock Hospitality	0	3	3	0	2.50

AGNC Investment presently has a consensus price target of $10.13, indicating a potential downside of 2.17%. DiamondRock Hospitality has a consensus price target of $9.92, indicating a potential upside of 16.39%. Given DiamondRock Hospitality’s higher probable upside, analysts plainly believe DiamondRock Hospitality is more favorable than AGNC Investment.

Summary

AGNC Investment beats DiamondRock Hospitality on 10 of the 16 factors compared between 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 DiamondRock Hospitality

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in leisure destinations and top gateway markets. The Company currently owns 36 premium quality hotels with over 9,700 rooms. The Company has strategically positioned its portfolio to be operated both under leading global brand families as well as independent boutique hotels in the lifestyle segment.