Head to Head Comparison: Chicago Atlantic Real Estate Finance (NASDAQ:REFI) and Invesco Mortgage Capital (NYSE:IVR)

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Invesco Mortgage Capital	$103.09 million	4.93	-$15.86 million	$1.20	6.98
Chicago Atlantic Real Estate Finance	$55.79 million	5.62	$38.71 million	$2.00	7.99

Chicago Atlantic Real Estate Finance has lower revenue, but higher earnings 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.

Institutional and Insider Ownership

40.5% of Invesco Mortgage Capital shares are owned by institutional investors. Comparatively, 25.5% of Chicago Atlantic Real Estate Finance shares are owned by institutional investors. 0.2% of Invesco Mortgage Capital shares are owned by company insiders. Comparatively, 12.3% of Chicago Atlantic Real Estate Finance shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

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

Dividends

Invesco Mortgage Capital pays an annual dividend of $1.60 per share and has a dividend yield of 19.1%. Chicago Atlantic Real Estate Finance pays an annual dividend of $1.88 per share and has a dividend yield of 11.8%. 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. 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.

Volatility & Risk

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

Analyst Ratings

This is a breakdown of current ratings and target prices for Invesco Mortgage Capital and Chicago Atlantic Real Estate Finance, as provided by MarketBeat.

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

Invesco Mortgage Capital currently has a consensus price target of $10.00, suggesting a potential upside of 19.47%. Chicago Atlantic Real Estate Finance has a consensus price target of $20.00, suggesting a potential upside of 25.16%. Given Chicago Atlantic Real Estate Finance’s stronger consensus rating and higher possible upside, 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 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.

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.