Financial Survey: Macerich (NYSE:MAC) vs. MFA Financial (NYSE:MFA)

Macerich (NYSE:MAC) and MFA Financial (NYSE:MFA) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Institutional and Insider Ownership

87.4% of Macerich shares are held by institutional investors. Comparatively, 65.3% of MFA Financial shares are held by institutional investors. 0.5% of Macerich shares are held by company insiders. Comparatively, 0.7% of MFA Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Macerich and MFA Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Macerich	8.98%	3.15%	1.05%
MFA Financial	28.38%	9.97%	1.71%

Analyst Recommendations

This is a summary of recent ratings and price targets for Macerich and MFA Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Macerich	2	7	1	0	1.90
MFA Financial	0	0	4	0	3.00

Macerich presently has a consensus target price of $18.86, suggesting a potential downside of 5.32%. MFA Financial has a consensus target price of $14.00, suggesting a potential upside of 37.39%. Given MFA Financial’s stronger consensus rating and higher probable upside, analysts plainly believe MFA Financial is more favorable than Macerich.

Dividends

Macerich pays an annual dividend of $0.68 per share and has a dividend yield of 3.4%. MFA Financial pays an annual dividend of $1.40 per share and has a dividend yield of 13.7%. Macerich pays out 174.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MFA Financial pays out 88.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MFA Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Macerich has a beta of 2.51, indicating that its stock price is 151% more volatile than the S&P 500. Comparatively, MFA Financial has a beta of 2.12, indicating that its stock price is 112% more volatile than the S&P 500.

Earnings and Valuation

This table compares Macerich and MFA Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Macerich	$883.22 million	5.61	-$274.07 million	$0.39	51.08
MFA Financial	$334.80 million	3.11	$80.16 million	$1.59	6.41

MFA Financial has lower revenue, but higher earnings than Macerich. MFA Financial is trading at a lower price-to-earnings ratio than Macerich, indicating that it is currently the more affordable of the two stocks.

Summary

MFA Financial beats Macerich on 11 of the 16 factors compared between the two stocks.

About Macerich

Macerich is a fully integrated, self-managed and self-administered real estate investment trust (REIT). As a leading owner, operator and developer of high-quality retail real estate in densely populated and attractive U.S. markets, Macerich’s portfolio is concentrated in California, the Pacific Northwest, Phoenix/Scottsdale, and the Metro New York to Washington, D.C. corridor. Developing and managing properties that serve as community cornerstones, Macerich currently owns 47 million square feet of real estate consisting primarily of interests in 44 regional town centers. Macerich is firmly dedicated to advancing environmental goals, social good and sound corporate governance. A recognized leader in sustainability, Macerich has achieved a #1 Global Real Estate Sustainability Benchmark (GRESB) ranking for the North American retail sector for nine consecutive years (2015-2023).

About MFA Financial

MFA Financial, Inc., together with its subsidiaries, operates as a real estate investment trust in the United States. It invests in residential mortgage securities, including non-agency mortgage-backed securities, agency MBS, and credit risk transfer securities; residential whole loans, including purchased performing loans, purchased credit deteriorated, and non-performing loans; and mortgage servicing rights related assets. The company was incorporated in 1997 and is based in New York, New York.