Reviewing Great Ajax Corp. (AJX)’s and Redwood Trust Inc. (NYSE:RWT)’s results

This is a contrast between Great Ajax Corp. (NYSE:AJX) and Redwood Trust Inc. (NYSE:RWT) based on their dividends, analyst recommendations, profitability, risk, institutional ownership, earnings and valuation. The two companies are REIT – Diversified and they also compete with each other.

Valuation & Earnings

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Great Ajax Corp. 56.83M 4.76 28.03M 1.05 12.77
Redwood Trust Inc. 215.59M 7.27 115.85M 1.30 12.12

Table 1 demonstrates Great Ajax Corp. and Redwood Trust Inc.’s gross revenue, earnings per share and valuation. Redwood Trust Inc. is observed to has higher revenue and earnings than Great Ajax Corp. The business with the higher price-to-earnings out of the two companies is considered for more expensive of the two firms currently. Great Ajax Corp.’s current price-to-earnings ratio is higher than that of Redwood Trust Inc., which means that it is the expensive of the two.

Profitability

Table 2 represents Great Ajax Corp. (NYSE:AJX) and Redwood Trust Inc. (NYSE:RWT)’s return on equity, return on assets and net margins.

Net Margins Return on Equity Return on Assets
Great Ajax Corp. 49.32% 9.4% 2%
Redwood Trust Inc. 53.74% 11.3% 1.9%

Risk and Volatility

Great Ajax Corp.’s 0.66 beta indicates that its volatility is 34.00% less volatile than that of Standard and Poor’s 500. Redwood Trust Inc. on the other hand, has 0.7 beta which makes it 30.00% less volatile compared to Standard and Poor’s 500.

Dividends

Great Ajax Corp. pays out an annual dividend of $1.22 per share while its dividend yield is 8.89%. On the other side, $1.18 per share with a dividend yield of 7.25% for Redwood Trust Inc.

Analyst Recommendations

Great Ajax Corp. and Redwood Trust Inc. Recommendations and Ratings are available in the next table.

Sell Ratings Hold Ratings Buy Ratings Rating Score
Great Ajax Corp. 0 0 0 0.00
Redwood Trust Inc. 0 0 2 3.00

Redwood Trust Inc. on the other hand boasts of a $17.75 consensus price target and a 9.50% potential upside.

Insider and Institutional Ownership

Roughly 84.6% of Great Ajax Corp. shares are owned by institutional investors while 85% of Redwood Trust Inc. are owned by institutional investors. About 0.7% of Great Ajax Corp.’s share are owned by insiders. Insiders Competitively, owned 0.2% of Redwood Trust Inc. shares.

Performance

Here are the Weekly, Monthly, Quarterly, Half Yearly, Yearly and YTD Performance of both pretenders.

Performance (W) Performance (M) Performance (Q) Performance (HY) Performance (Y) Performance (YTD)
Great Ajax Corp. 1.91% 3.49% 2.86% -1.74% 2.62% 11.31%
Redwood Trust Inc. 2.33% -2.11% -5.73% -6.95% 7.71% 4.78%

For the past year Great Ajax Corp. has stronger performance than Redwood Trust Inc.

Summary

On 10 of the 16 factors Redwood Trust Inc. beats Great Ajax Corp.

Redwood Trust, Inc., together with its subsidiaries, engages in mortgage banking activities in the United States. The company operates through three segments: Residential Investments, Residential Mortgage Banking, and Commercial. The Residential Investments segment offers a portfolio of investments in residential mortgage-backed securities retained from Sequoia securitizations and issued by third parties and other credit risk-related investments; residential loans held for investment; mortgage servicing rights associated with residential loans; and derivative financial instruments to manage risks associated with residential loans. The Residential Mortgage Banking segment operates a mortgage loan conduit, which acquires residential loans from third-party originators for sale, securitization, or transfer to investment portfolio. This segment also includes derivative financial instruments to manage risks associated with residential loans. The Commercial segment consists of investments in multi-family securities and commercial mortgage-backed securities, as well as one remaining commercial loan investments. It qualifies as a real estate investment trust (REIT) for federal income tax purposes. As a REIT, the company intends to distribute at least 90% of its taxable income as dividends to shareholders. Redwood Trust, Inc. was founded in 1994 and is headquartered in Mill Valley, California.