Orchid Island Capital (NYSE:ORC – Get Free Report) and Wheeler Real Estate Investment Trust (NASDAQ:WHLR – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitability and analyst recommendations.
Risk and Volatility
Orchid Island Capital has a beta of 1.83, indicating that its share price is 83% more volatile than the S&P 500. Comparatively, Wheeler Real Estate Investment Trust has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent recommendations for Orchid Island Capital and Wheeler Real Estate Investment Trust, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Orchid Island Capital | 0 | 1 | 1 | 0 | 2.50 |
| Wheeler Real Estate Investment Trust | 0 | 0 | 0 | 0 | 0.00 |
Dividends
Orchid Island Capital pays an annual dividend of $1.44 per share and has a dividend yield of 16.3%. Wheeler Real Estate Investment Trust pays an annual dividend of $1.68 per share and has a dividend yield of 59.2%. Orchid Island Capital pays out 240.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Wheeler Real Estate Investment Trust pays out -0.1% of its earnings in the form of a dividend. Wheeler Real Estate Investment Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Orchid Island Capital and Wheeler Real Estate Investment Trust”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Orchid Island Capital | $54.41 million | 15.16 | $37.78 million | $0.60 | 14.73 |
| Wheeler Real Estate Investment Trust | $103.20 million | 0.03 | -$4.69 million | ($1,554.97) | 0.00 |
Orchid Island Capital has higher earnings, but lower revenue than Wheeler Real Estate Investment Trust. Wheeler Real Estate Investment Trust is trading at a lower price-to-earnings ratio than Orchid Island Capital, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
32.7% of Orchid Island Capital shares are owned by institutional investors. Comparatively, 35.3% of Wheeler Real Estate Investment Trust shares are owned by institutional investors. 0.6% of Orchid Island Capital shares are owned by insiders. Comparatively, 40.6% of Wheeler Real Estate Investment Trust shares are owned by 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.
Profitability
This table compares Orchid Island Capital and Wheeler Real Estate Investment Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Orchid Island Capital | N/A | -2.01% | -0.23% |
| Wheeler Real Estate Investment Trust | -29.69% | N/A | -4.57% |
Summary
Orchid Island Capital beats Wheeler Real Estate Investment Trust on 10 of the 16 factors compared between the two stocks.
About Orchid Island Capital
Orchid Island Capital, Inc., a specialty finance company, invests in residential mortgage-backed securities (RMBS) in the United States. The company’s RMBS is backed by single-family residential mortgage loans, referred as Agency RMBS. Its portfolio includes traditional pass-through Agency RMBS, such as mortgage pass through certificates and collateralized mortgage obligations; and structured Agency RMBS comprising interest only securities, inverse interest only securities, and principal only securities. The company has elected to be taxed as a real estate investment trust (REIT) for the United States federal income tax purposes. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to stockholders, if it annually distributes dividends equal to at least 90% of its REIT taxable income to its stockholders. Orchid Island Capital, Inc. was incorporated in 2010 and is headquartered in Vero Beach, Florida.
About Wheeler Real Estate Investment Trust
Headquartered in Virginia Beach, Virginia, Wheeler Real Estate Investment Trust, Inc. is a fully integrated, self-managed commercial real estate investment trust (REIT) focused on owning and operating income-producing retail properties with a primary focus on grocery-anchored centers.
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