Head to Head Contrast: Dynex Capital (NYSE:DX) vs. CubeSmart (NYSE:CUBE)

Dynex Capital (NYSE:DX) and CubeSmart (NYSE:CUBE) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Dynex Capital and CubeSmart, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dynex Capital	0	1	4	0	2.80
CubeSmart	0	8	4	0	2.33

Dynex Capital presently has a consensus target price of $13.63, indicating a potential upside of 18.43%. CubeSmart has a consensus target price of $48.00, indicating a potential upside of 33.78%. Given CubeSmart’s higher probable upside, analysts plainly believe CubeSmart is more favorable than Dynex Capital.

Dividends

Dynex Capital pays an annual dividend of $2.04 per share and has a dividend yield of 17.7%. CubeSmart pays an annual dividend of $2.08 per share and has a dividend yield of 5.8%. Dynex Capital pays out 138.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CubeSmart pays out 120.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CubeSmart has raised its dividend for 16 consecutive years.

Insider & Institutional Ownership

38.3% of Dynex Capital shares are held by institutional investors. Comparatively, 97.6% of CubeSmart shares are held by institutional investors. 2.5% of Dynex Capital shares are held by company insiders. Comparatively, 1.7% of CubeSmart shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Dynex Capital and CubeSmart”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dynex Capital	$150.40 million	7.36	$113.90 million	$1.47	7.83
CubeSmart	$1.07 billion	7.67	$410.76 million	$1.72	20.86

CubeSmart has higher revenue and earnings than Dynex Capital. Dynex Capital is trading at a lower price-to-earnings ratio than CubeSmart, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Dynex Capital has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500. Comparatively, CubeSmart has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500.

Profitability

This table compares Dynex Capital and CubeSmart’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dynex Capital	35.65%	-2.24%	-0.30%
CubeSmart	37.79%	14.33%	6.48%

Summary

CubeSmart beats Dynex Capital on 12 of the 16 factors compared between the two stocks.

About Dynex Capital

Dynex Capital, Inc., a mortgage real estate investment trust, invests in mortgage-backed securities (MBS) on a leveraged basis in the United States. It invests in agency and non-agency MBS consisting of residential MBS, commercial MBS (CMBS), and CMBS interest-only securities. Agency MBS have a guaranty of principal payment by an agency of the U.S. government or a U.S. government-sponsored entity, such as Fannie Mae and Freddie Mac. Non-Agency MBS have no such guaranty of payment. The company has qualified as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders as dividends. Dynex Capital, Inc. was incorporated in 1987 and is headquartered in Glen Allen, Virginia.

About CubeSmart

CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and, in most locations, climate-controlled storage space for residential and commercial customers. According to the 2023 Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.