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MFA Financial (MFA)
NYSE:MFA
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MFA Financial
(NYSE:MFA)
Rating:62Neutral
Price Target:―
Positive Factors
Portfolio Expansion
MFA Financial, Inc. acquired $470M of non-qualified mortgage residential loans with an average coupon of 7.8%, expanding its portfolio significantly.
Securitization
MFA completed three securitizations collateralized by over $1.0B of loans, enhancing its securitized RMBS debt to approximately $5.8B.
Strategic Asset Growth
MFA added $463M of Agency MBS, increasing the portfolio to a total of $1.4B, showing strategic growth in assets.
Negative Factors
Net Interest Spread
The company’s net interest spread declined by 12 basis points to 2.14%, reflecting the impact of high funding costs.
Stock Valuation
MFA shares are trading at a steep discount to current GAAP BVPS and economic BVPS.
MFA Financial (MFA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$989.57M
Dividend Yield14.91%
Average Volume (3M)1.15M
Price to Earnings (P/E)9.8
Beta (1Y)0.81
Revenue Growth26.34%
EPS Growth79.07%
CountryUS
Employees348
SectorReal Estate
Sector Strength56
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.29
Shares Outstanding102,652,860
10 Day Avg. Volume1,571,006
30 Day Avg. Volume1,150,052
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)0.51
Price to Sales (P/S)0.00
P/FCF Ratio2.78
Enterprise Value/Market Cap4.36
Enterprise Value/Revenue3.57
Enterprise Value/Gross Profit16.31
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.88Price Target Upside12.86% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
MFA Financial Business Overview & Revenue Model
Company DescriptionMFA Financial, Inc. (MFA) is a leading real estate investment trust (REIT) that focuses on investing in residential mortgage assets. The company operates within the financial sector, specifically targeting the residential mortgage market. MFA Financial manages a diversified portfolio that includes residential whole loans, mortgage-backed securities, and other real estate-related assets. Its primary objective is to generate attractive risk-adjusted returns for its shareholders through a combination of dividends and capital appreciation.
How the Company Makes MoneyMFA Financial makes money by investing in residential mortgage assets and earning income from these investments. The company's revenue model centers around acquiring and managing a portfolio of residential whole loans and mortgage-backed securities, which generate interest income. MFA leverages its expertise in managing mortgage credit risk to maximize returns. The company also benefits from the capital appreciation of its real estate assets. Additionally, MFA Financial engages in securitization and other financial transactions to enhance its liquidity and financial performance. Key revenue streams include interest income from mortgage investments, gains from the sale of mortgage-backed securities, and income generated from securitization activities. Significant partnerships with financial institutions and access to capital markets further contribute to its earnings and operational efficiency.
MFA Financial Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: -2.72%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with notable positive developments such as a dividend increase and strong economic return, juxtaposed with challenges like declining economic book value and decreased Lima One income. The overall sentiment is cautious as the company navigates market volatility and anticipates potential short-term credit losses.Q1-2025 Updates
Positive Updates
Dividend Increase
MFA increased its first quarter dividend to $0.36, reflecting confidence in the earnings power of its portfolio.
Total Economic Return
MFA's portfolio delivered a total economic return of 1.9% for the first quarter, despite market volatility.
Sourcing of Loans and Securities
MFA sourced $875 million of loans and securities across target asset classes, including $383 million of non-QM loans.
Non-QM Securitization
Successfully issued the 17th non-QM securitization, selling $283 million of bonds.
Stable GAAP Earnings
GAAP earnings for the quarter were $41.2 million or $0.32 per basic common share.
Negative Updates
Economic Book Value Decline
Economic book value decreased slightly by 0.6% in the first quarter, with further estimated decline of 2% to 4% post-quarter.
Lima One Decline
Lima One's mortgage banking income declined from $8.5 million in Q4 to $5.4 million in Q1 due to lower origination volumes.
Distributable Earnings Drop
Distributable earnings fell to $30.5 million or $0.29 per share, down from $0.39 due to expired interest rate swaps and increased credit-related charges.
Volatility Impact
The market volatility and uncertainties following April 2 have affected the fixed income and mortgage sectors.
Credit Losses Anticipation
Anticipation of short-term increases in realized credit losses in upcoming quarters due to challenged assets in the transitional loan portfolio.
Company Guidance
During the MFA Financial first quarter 2025 financial results conference call, CEO Craig Knutson highlighted several key metrics and developments. The company's portfolio delivered a total economic return of 1.9%, including a quarterly dividend increase to $0.36, reflecting confidence in the portfolio's earnings power. Economic book value saw a modest decline of 0.6%. The firm sourced $875 million in loans and securities, including $383 million in non-QM loans, $268 million in Agency MBS, and $223 million in business purpose loans. MFA issued its 17th non-QM securitization and sold $70 million in SFR loans. Leverage at quarter-end was 5.1x overall and 1.8x recourse. Despite market volatility post-quarter-end, MFA's strategic focus on securitization and non-mark-to-market financing helped manage margin calls effectively. Subsequent to the quarter, economic book value was estimated to be down 2% to 4% due to wider spreads, net of dividend accrual.MFA Financial Financial Statement Overview
Summary
MFA Financial shows a mixed financial performance with strengths in net income improvement and a solid balance sheet. However, the absence of revenue growth in 2024 and fluctuating cash flows due to strategic adjustments raise concerns about future profitability.Income Statement
The income statement reveals fluctuating revenues and profitability. Total revenue has been inconsistent, with a significant decline in 2024 to zero, probably due to accounting adjustments or extraordinary items. The net income has shown improvement, turning positive in recent years after a substantial loss in 2020. However, the absence of EBIT and EBITDA metrics in 2024 makes it challenging to assess operational efficiency.45
Neutral
Balance Sheet
The balance sheet highlights a strong equity position relative to liabilities, with stockholders' equity remaining stable. The debt-to-equity ratio has improved significantly as total debt was eliminated by 2024, contributing to a safer financial structure. The equity ratio is moderate, reflecting a balanced capital structure. However, a decline in total assets suggests potential downsizing or asset divestitures.60
Neutral
Cash Flow
Cash flow analysis shows positive free cash flow and operating cash flow over the years, indicating good liquidity. The operating cash flow to net income ratio is robust, suggesting efficient cash generation relative to earnings. However, cash flow from investing activities has been negative, likely due to strategic reinvestments or asset sales.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 264.48M | 252.85M | 234.05M | 195.85M | 337.22M | -555.87M |
| Gross Profit | 264.48M | 252.85M | 199.91M | 143.76M | 299.75M | -1.11B |
| EBITDA | 0.00 | 0.00 | 0.00 | 0.00 | 433.02M | -679.39M |
| Net Income | 137.21M | 119.25M | 80.16M | -247.34M | 328.87M | -679.39M |
Balance Sheet | ||||||
| Total Assets | 11.52B | 11.41B | 10.77B | 9.11B | 9.14B | 6.93B |
| Cash, Cash Equivalents and Short-Term Investments | 0.00 | 0.00 | 318.00M | 334.18M | 304.70M | 814.35M |
| Total Debt | 6.10B | 6.02B | 5.00B | 3.63B | 2.92B | 1.84B |
| Total Liabilities | 9.68B | 9.57B | 8.87B | 7.12B | 6.60B | 4.41B |
| Stockholders Equity | 1.84B | 1.84B | 1.90B | 1.99B | 2.54B | 2.52B |
Cash Flow | ||||||
| Free Cash Flow | 132.09M | 200.12M | 108.74M | 365.78M | 108.25M | 33.53M |
| Operating Cash Flow | 132.09M | 200.12M | 108.74M | 366.08M | 120.29M | 38.40M |
| Investing Cash Flow | -584.74M | -424.60M | -1.55B | -1.13B | -2.17B | 6.38B |
| Financing Cash Flow | 396.77M | 337.58M | 1.43B | 850.21M | 1.63B | -5.74B |
MFA Financial Technical Analysis
Positive
9.64
Price Trends
9.49
Positive
9.79
Negative
10.23
Negative
Market Momentum
<0.01
Negative
55.19
Neutral
52.53
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MFA, the sentiment is Positive. The current price of 9.64 is above the 20-day moving average (MA) of 9.51, above the 50-day MA of 9.49, and below the 200-day MA of 10.23, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 55.19 is Neutral, neither overbought nor oversold. The STOCH value of 52.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MFA.
MFA Financial Risk Analysis
MFA Financial disclosed 66 risk factors in its most recent earnings report. MFA Financial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
MFA Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | £997.73M | 12.13 | -0.02% | 4.96% | 10.34% | 31.28% | |
65 Neutral | $1.23B | 9.41 | 9.59% | 11.87% | 11.91% | 52.26% | |
63 Neutral | $1.14B | 9.42 | 8.09% | 10.50% | 7.13% | 64.82% | |
62 Neutral | $989.57M | 9.82 | 7.34% | 14.91% | 26.34% | 79.07% | |
60 Neutral | $1.30B | 15.65 | 6.01% | 16.72% | 73.74% | -34.10% | |
56 Neutral | $922.52M | 16.48 | 5.07% | 12.83% | -6.28% | -49.57% | |
46 Neutral | $767.28M | ― | -12.42% | 10.94% | -31.47% | -204.79% |
* Real Estate Sector Average
Performance Comparison
MFA
MFA Financial
9.64
0.13
1.37%
CIM
Chimera Investment
14.06
2.50
21.63%
DX
Dynex Capital
12.12
1.96
19.29%
EFC
Ellington Financial
12.98
2.37
22.34%
RC
Ready Capital
4.50
-2.88
-39.02%
FBRT
Franklin BSP Realty Trust
11.03
-0.43
-3.75%
MFA Financial Corporate Events
Executive/Board Changes
MFA Financial Appoints Christopher Small to Board
Neutral
Mar 4, 2025
On March 4, 2025, MFA Financial, Inc. announced the election of Christopher Small to its Board of Directors, filling the vacancy left by the passing of Francis J. Oelerich III in December 2024. Mr. Small, with extensive experience in investment banking and capital markets, will also serve on the Audit and Compensation Committees, bringing valuable expertise to MFA’s Board, management team, and stockholders.
Executive/Board ChangesPrivate Placements and FinancingBusiness Operations and StrategyFinancial Disclosures
MFA Financial Reports 2024 Year-End Financial Results
Positive
Feb 19, 2025
MFA Financial, Inc. announced its financial results for the fourth quarter and full year of 2024, revealing a GAAP net income to common stockholders of $86.4 million for the year, up from $47.3 million in 2023. Despite a challenging fourth quarter with a total economic return of -1.2%, the company leveraged market conditions to acquire $1.2 billion in loans and securities, positioning itself for future growth. Key activities in 2024 included the acquisition of $2.6 billion in loans, eight loan securitizations, and expanding its Agency MBS portfolio to $1.4 billion. The company also navigated leadership changes and issued $190 million of senior unsecured notes, enhancing its strategic positioning for 2025.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.