AUS
NZ
UK
CA
USA
IND
Highlights
- Fannie Mae shows superior metrics in profitability and revenue against Federal Home Loan Mortgage.
- Higher institutional and insider ownership suggest confidence in Fannie Mae’s long-term performance.
- Fannie Mae presents a lower volatility compared to Federal Home Loan Mortgage.
The financial landscape of mortgage companies is notably occupied by two prominent mid-cap entities: the Federal Home Loan Mortgage Corporation (NYSE:FMCC) and the Federal National Mortgage Association (NYSE:FNMA), commonly known as Freddie Mac and Fannie Mae, respectively. Both play pivotal roles within the secondary mortgage market, providing critical infrastructure to the housing finance system. Here, we present an in-depth analysis comparing these financial behemoths across various financial metrics and market perception factors.
Ownership Structure
Institutional and insider ownership can provide insights into market confidence. Currently, 0.1% of shares in the Federal Home Loan Mortgage are owned by insiders, with negligible institutional ownership. In contrast, 1.0% of Fannie Mae’s shares are insider-owned. Such ownership patterns can suggest better confidence among company insiders in Fannie Mae’s market trajectory.
Volatility and Risk
Volatility gives an indication of stock price fluctuations relative to the market. Federal Home Loan Mortgage’s beta stands at 2.09, indicating 109% more volatility than the S&P 500 index. Fannie Mae’s beta is slightly lower at 1.98, suggesting it is slightly less volatile, albeit still higher than the market average.
Profitability and Financial Performance
When assessing profitability, Fannie Mae edges out Federal Home Loan Mortgage with net margins of 11.12% compared to 9.74%. Both companies exhibit negative returns on equity, with Federal Home Loan Mortgage at -33.18% and Fannie Mae marginally better at -32.94%. Although these figures illustrate challenges in profitable equity investment, Fannie Mae's performance still remains relatively advantageous.
Revenue and Earnings
Fannie Mae excels in revenue generation and earnings, reporting top-line revenue of $152.67 billion, compared to Federal Home Loan Mortgage’s $108.05 billion. This robust revenue growth marks Fannie Mae as a more substantial entity in terms of market share and financial capacity.
Valuation Metrics
Fannie Mae presents a more impressive valuation landscape with a Price/Sales ratio of 0.05 compared to Federal Home Loan Mortgage’s 0.03. Although both companies face potential downsides with their existing price targets, analysts attribute a relatively better valuation standing to Fannie Mae.
In comparing these two significant players in the mortgage finance sector, Fannie Mae appears to hold an advantage in most financial and market perception metrics. With higher revenue, more favorable ownership patterns, and slightly better risk positioning, Fannie Mae seems well-placed to maintain its leadership in profitability and market confidence over the Federal Home Loan Mortgage.
