Analyzing Easterly Government Properties (NYSE:DEA) & Annaly Capital Management (NYSE:NLY)

Annaly Capital Management (NYSE:NLY) and Easterly Government Properties (NYSE:DEA) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, dividends, risk, analyst recommendations, valuation and institutional ownership.

Insider & Institutional Ownership

51.6% of Annaly Capital Management shares are owned by institutional investors. Comparatively, 86.5% of Easterly Government Properties shares are owned by institutional investors. 0.2% of Annaly Capital Management shares are owned by insiders. Comparatively, 8.1% of Easterly Government Properties shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Annaly Capital Management and Easterly Government Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Annaly Capital Management	0	2	8	0	2.80
Easterly Government Properties	0	1	1	0	2.50

Annaly Capital Management currently has a consensus price target of $21.33, suggesting a potential upside of 7.58%. Easterly Government Properties has a consensus price target of $14.50, suggesting a potential upside of 7.13%. Given Annaly Capital Management’s stronger consensus rating and higher probable upside, equities analysts plainly believe Annaly Capital Management is more favorable than Easterly Government Properties.

Profitability

This table compares Annaly Capital Management and Easterly Government Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Annaly Capital Management	2.59%	14.75%	1.57%
Easterly Government Properties	6.49%	1.36%	0.65%

Valuation & Earnings

This table compares Annaly Capital Management and Easterly Government Properties”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Annaly Capital Management	$3.73 billion	2.98	-$1.64 billion	($0.07)	-283.29
Easterly Government Properties	$287.23 million	4.86	$18.80 million	$0.19	71.24

Easterly Government Properties has lower revenue, but higher earnings than Annaly Capital Management. Annaly Capital Management is trading at a lower price-to-earnings ratio than Easterly Government Properties, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Annaly Capital Management has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500. Comparatively, Easterly Government Properties has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500.

Dividends

Annaly Capital Management pays an annual dividend of $2.60 per share and has a dividend yield of 13.1%. Easterly Government Properties pays an annual dividend of $1.06 per share and has a dividend yield of 7.8%. Annaly Capital Management pays out -3,714.3% of its earnings in the form of a dividend. Easterly Government Properties pays out 557.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Annaly Capital Management is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Annaly Capital Management beats Easterly Government Properties on 9 of the 16 factors compared between the two stocks.

About Annaly Capital Management

Annaly Capital Management, Inc., a diversified capital manager, engages in mortgage finance. The company invests in agency mortgage-backed securities collateralized by residential mortgages; non-agency residential whole loans and securitized products within the residential and commercial markets; mortgage servicing rights; agency commercial mortgage-backed securities; to-be-announced forward contracts; residential mortgage loans; and agency or private label credit risk transfer securities. It has elected to be taxed as a real estate investment trust (REIT). As a REIT, it is not subject to federal income tax to the extent that it distributes its taxable income to its shareholders. The company was incorporated in 1996 and is based in New York, New York.

About Easterly Government Properties

Easterly Government Properties, Inc. (NYSE: DEA) is based in Washington, D.C., and focuses primarily on the acquisition, development and management of Class A commercial properties that are leased to the U.S. Government. Easterly’s experienced management team brings specialized insight into the strategy and needs of mission-critical U.S. Government agencies for properties leased to such agencies either directly or through the U.S. General Services Administration (GSA).