Assessing MFA Financial Inc’s (NYSE:MFA) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how MFA Financial is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its mortgage reits industry peers. View our latest analysis for MFA Financial
Were MFA’s earnings stronger than its past performances and the industry?
I like to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique enables me to assess various companies in a uniform manner using new information. For MFA Financial, its latest earnings (trailing twelve month) is US$305.69M, which compared to the prior year’s level, has risen by a somewhat subdued 3.26%. Given that these figures are relatively nearsighted, I have created an annualized five-year value for MFA’s earnings, which stands at US$293.68M This means generally, MFA Financial has been able to consistently grow its net income over the past few years as well.How has it been able to do this? Well, let’s take a look at if it is merely attributable to industry tailwinds, or if MFA Financial has seen some company-specific growth. The rise in earnings seems to be bolstered by a solid top-line increase outpacing its growth rate of expenses. Though this has caused a margin contraction, it has made MFA Financial more profitable. Eyeballing growth from a sector-level, the US mortgage reits industry has been growing, albeit, at a subdued single-digit rate of 5.84% over the prior year, . This is a change from a volatile drop of -2.55% in the past few years. This means in the recent industry expansion, MFA Financial has not been able to leverage it as much as its average peer.
What does this mean?
Though MFA Financial’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research MFA Financial to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for MFA’s future growth? Take a look at our free research report of analyst consensus for MFA’s outlook.
- 2. Financial Health: Is MFA’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.