Head to Head Review: OUTFRONT Media (NYSE:OUT) & Invesco Mortgage Capital (NYSE:IVR)

Invesco Mortgage Capital (NYSE:IVR) and OUTFRONT Media (NYSE:OUT) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Volatility & Risk

Invesco Mortgage Capital has a beta of 1.9, meaning that its stock price is 90% more volatile than the S&P 500. Comparatively, OUTFRONT Media has a beta of 1.92, meaning that its stock price is 92% more volatile than the S&P 500.

Earnings & Valuation

This table compares Invesco Mortgage Capital and OUTFRONT Media’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Invesco Mortgage Capital	-$6.02 million	-70.25	-$15.86 million	($0.70)	-12.37
OUTFRONT Media	$1.84 billion	1.45	-$430.40 million	($2.66)	-6.05

Invesco Mortgage Capital has higher earnings, but lower revenue than OUTFRONT Media. Invesco Mortgage Capital is trading at a lower price-to-earnings ratio than OUTFRONT Media, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Invesco Mortgage Capital and OUTFRONT Media’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Invesco Mortgage Capital	-2.96%	62.02%	5.67%
OUTFRONT Media	-23.38%	-72.77%	-7.71%

Analyst Recommendations

This is a summary of current recommendations for Invesco Mortgage Capital and OUTFRONT Media, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Invesco Mortgage Capital	0	2	1	0	2.33
OUTFRONT Media	0	3	1	0	2.25

Invesco Mortgage Capital presently has a consensus price target of $9.00, indicating a potential upside of 3.93%. OUTFRONT Media has a consensus price target of $16.00, indicating a potential downside of 0.62%. Given Invesco Mortgage Capital’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Invesco Mortgage Capital is more favorable than OUTFRONT Media.

Dividends

Invesco Mortgage Capital pays an annual dividend of $1.60 per share and has a dividend yield of 18.5%. OUTFRONT Media pays an annual dividend of $1.20 per share and has a dividend yield of 7.5%. Invesco Mortgage Capital pays out -228.6% of its earnings in the form of a dividend. OUTFRONT Media pays out -45.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Invesco Mortgage Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

40.5% of Invesco Mortgage Capital shares are owned by institutional investors. 0.2% of Invesco Mortgage Capital shares are owned by insiders. Comparatively, 1.2% of OUTFRONT Media shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Invesco Mortgage Capital beats OUTFRONT Media on 10 of the 15 factors compared between the two stocks.

About Invesco Mortgage Capital

Invesco Mortgage Capital Inc. operates as a real estate investment trust (REIT) that invests, finances, and manages mortgage-backed securities and other mortgage-related assets in the United States. It invests in residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities (CMBS) that are guaranteed by a U.S. government agency or federally chartered corporation; RMBS and CMBS that are not issued or guaranteed by the United States government agency or federally chartered corporation; the United States treasury securities; real estate-related financing arrangements; to-be-announced securities forward contracts to purchase RMBS; and commercial mortgage loans. It has elected to be taxed as a REIT and would be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was incorporated in 2008 and is headquartered in Atlanta, Georgia.

About OUTFRONT Media

OUTFRONT leverages the power of technology, location, and creativity to connect brands with consumers outside of their homes through one of the largest and most diverse sets of billboard, transit, and mobile assets in North America. Through its technology platform, OUTFRONT will fundamentally change the ways advertisers engage audiences on-the-go.