Financial Review: Orchid Island Capital (NYSE:ORC) vs. Mid-America Apartment Communities (NYSE:MAA)

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Orchid Island Capital and Mid-America Apartment Communities, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orchid Island Capital	0	1	1	0	2.50
Mid-America Apartment Communities	1	8	8	0	2.41

Orchid Island Capital currently has a consensus price target of $9.50, indicating a potential upside of 21.33%. Mid-America Apartment Communities has a consensus price target of $159.91, indicating a potential upside of 3.42%. Given Orchid Island Capital’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Orchid Island Capital is more favorable than Mid-America Apartment Communities.

Insider & Institutional Ownership

32.7% of Orchid Island Capital shares are owned by institutional investors. Comparatively, 93.6% of Mid-America Apartment Communities shares are owned by institutional investors. 0.6% of Orchid Island Capital shares are owned by insiders. Comparatively, 1.3% of Mid-America Apartment Communities 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.

Earnings and Valuation

This table compares Orchid Island Capital and Mid-America Apartment Communities”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orchid Island Capital	-$21.38 million	-19.40	-$39.23 million	($0.53)	-14.77
Mid-America Apartment Communities	$2.17 billion	8.31	$552.81 million	$4.77	32.42

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

Dividends

Orchid Island Capital pays an annual dividend of $1.44 per share and has a dividend yield of 18.4%. Mid-America Apartment Communities pays an annual dividend of $5.88 per share and has a dividend yield of 3.8%. Orchid Island Capital pays out -271.7% of its earnings in the form of a dividend. Mid-America Apartment Communities pays out 123.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mid-America Apartment Communities has raised its dividend for 15 consecutive years. Orchid Island Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Orchid Island Capital has a beta of 1.85, indicating that its stock price is 85% more volatile than the S&P 500. Comparatively, Mid-America Apartment Communities has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.

Profitability

This table compares Orchid Island Capital and Mid-America Apartment Communities’ 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%
Mid-America Apartment Communities	23.73%	8.25%	4.50%

Summary

Mid-America Apartment Communities beats Orchid Island Capital on 12 of the 17 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 Mid-America Apartment Communities

MAA, an S&P 500 company, is a real estate investment trust (REIT) focused on delivering full-cycle and superior investment performance for shareholders through the ownership, management, acquisition, development and redevelopment of quality apartment communities primarily in the Southeast, Southwest and Mid-Atlantic regions of the United States. As of December 31, 2023, MAA had ownership interest in 102,662 apartment units, including communities currently in development, across 16 states and the District of Columbia.