Chicago Atlantic Real Estate Finance (NASDAQ:REFI) versus Invesco Mortgage Capital (NYSE:IVR) Head-To-Head Survey

Chicago Atlantic Real Estate Finance (NASDAQ:REFI) and Invesco Mortgage Capital (NYSE:IVR) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Insider and Institutional Ownership

25.5% of Chicago Atlantic Real Estate Finance shares are held by institutional investors. Comparatively, 40.5% of Invesco Mortgage Capital shares are held by institutional investors. 12.3% of Chicago Atlantic Real Estate Finance shares are held by company insiders. Comparatively, 0.2% of Invesco Mortgage Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Chicago Atlantic Real Estate Finance has a beta of 0.23, meaning that its share price is 77% less volatile than the S&P 500. Comparatively, Invesco Mortgage Capital has a beta of 1.89, meaning that its share price is 89% more volatile than the S&P 500.

Profitability

This table compares Chicago Atlantic Real Estate Finance and Invesco Mortgage Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chicago Atlantic Real Estate Finance	64.57%	13.17%	10.10%
Invesco Mortgage Capital	30.67%	36.90%	3.50%

Dividends

Chicago Atlantic Real Estate Finance pays an annual dividend of $1.88 per share and has a dividend yield of 11.6%. Invesco Mortgage Capital pays an annual dividend of $1.60 per share and has a dividend yield of 19.4%. Chicago Atlantic Real Estate Finance pays out 94.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Invesco Mortgage Capital pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation and Earnings

This table compares Chicago Atlantic Real Estate Finance and Invesco Mortgage Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chicago Atlantic Real Estate Finance	$55.79 million	5.71	$38.71 million	$2.00	8.11
Invesco Mortgage Capital	$103.09 million	4.87	-$15.86 million	$1.20	6.88

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

Analyst Ratings

This is a summary of recent ratings and target prices for Chicago Atlantic Real Estate Finance and Invesco Mortgage Capital, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chicago Atlantic Real Estate Finance	0	0	2	1	3.33
Invesco Mortgage Capital	0	1	1	0	2.50

Chicago Atlantic Real Estate Finance currently has a consensus price target of $20.00, suggesting a potential upside of 23.38%. Invesco Mortgage Capital has a consensus price target of $10.00, suggesting a potential upside of 21.07%. Given Chicago Atlantic Real Estate Finance’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Chicago Atlantic Real Estate Finance is more favorable than Invesco Mortgage Capital.

Summary

Chicago Atlantic Real Estate Finance beats Invesco Mortgage Capital on 12 of the 17 factors compared between the two stocks.

About Chicago Atlantic Real Estate Finance

Chicago Atlantic Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. The company engages in originating, structuring, and investing in first mortgage loans and alternative structured financings secured by commercial real estate properties. Its portfolio primarily includes offers senior loans to state-licensed operators in the cannabis industry. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Chicago Atlantic Real Estate Finance, Inc. was incorporated in 2021 and is headquartered in Chicago, Illinois.

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.