Invesco Mortgage Capital (NYSE:IVR – Get Free Report) and City Office REIT (NYSE:CIO – Get Free Report) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, earnings, profitability, analyst recommendations, risk and institutional ownership.
Earnings & Valuation
This table compares Invesco Mortgage Capital and City Office REIT’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 | $194.51 million | 2.57 | -$402.92 million | ($5.07) | -2.37 |
| City Office REIT | $180.49 million | 1.21 | $16.99 million | ($0.37) | -14.78 |
City Office REIT has lower revenue, but higher earnings than Invesco Mortgage Capital. City Office REIT is trading at a lower price-to-earnings ratio than Invesco Mortgage Capital, indicating that it is currently the more affordable of the two stocks.
Dividends
Profitability
This table compares Invesco Mortgage Capital and City Office REIT’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Invesco Mortgage Capital | -69.05% | 42.46% | 4.40% |
| City Office REIT | -3.76% | -0.96% | -0.43% |
Insider & Institutional Ownership
48.9% of Invesco Mortgage Capital shares are owned by institutional investors. Comparatively, 71.5% of City Office REIT shares are owned by institutional investors. 0.2% of Invesco Mortgage Capital shares are owned by company insiders. Comparatively, 3.4% of City Office REIT shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a summary of recent ratings and price targets for Invesco Mortgage Capital and City Office REIT, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Invesco Mortgage Capital | 1 | 0 | 0 | 0 | 1.00 |
| City Office REIT | 0 | 1 | 1 | 0 | 2.50 |
Invesco Mortgage Capital currently has a consensus price target of $11.50, indicating a potential downside of 4.25%. City Office REIT has a consensus price target of $10.33, indicating a potential upside of 88.91%. Given City Office REIT’s stronger consensus rating and higher possible upside, analysts clearly believe City Office REIT is more favorable than Invesco Mortgage Capital.
Volatility and Risk
Invesco Mortgage Capital has a beta of 1.66, indicating that its share price is 66% more volatile than the S&P 500. Comparatively, City Office REIT has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.
Summary
City Office REIT beats Invesco Mortgage Capital 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 primarily focuses on investing in, financing, and managing mortgage-backed securities and other mortgage-related assets. 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 a U.S. government agency or federally chartered corporation; credit risk transfer securities that are unsecured obligations issued by government-sponsored enterprises; residential and commercial mortgage loans; and other real estate-related financing arrangements. Invesco Mortgage Capital Inc. 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 City Office REIT
City Office REIT is an internally-managed real estate company focused on acquiring, owning and operating high-quality office properties located predominantly in Sun Belt markets. City Office currently owns or has a controlling interest in 6.0 million square feet of office properties. The Company has elected to be taxed as a real estate investment trust for U.S. federal income tax purposes.
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