Analyzing Orchid Island Capital (NYSE:ORC) and Equinix (NASDAQ:EQIX)

Equinix (NASDAQ:EQIX) and Orchid Island Capital (NYSE:ORC) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, dividends, analyst recommendations, institutional ownership, risk and valuation.

Insider and Institutional Ownership

94.9% of Equinix shares are owned by institutional investors. Comparatively, 32.7% of Orchid Island Capital shares are owned by institutional investors. 0.3% of Equinix shares are owned by insiders. Comparatively, 0.6% of Orchid Island Capital shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Equinix and Orchid Island Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equinix	0	5	11	0	2.69
Orchid Island Capital	0	1	1	0	2.50

Equinix currently has a consensus price target of $876.71, suggesting a potential upside of 7.18%. Orchid Island Capital has a consensus price target of $9.50, suggesting a potential upside of 16.42%. Given Orchid Island Capital’s higher probable upside, analysts clearly believe Orchid Island Capital is more favorable than Equinix.

Risk & Volatility

Equinix has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, Orchid Island Capital has a beta of 1.85, suggesting that its stock price is 85% more volatile than the S&P 500.

Valuation & Earnings

This table compares Equinix and Orchid Island Capital’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equinix	$8.46 billion	9.18	$969.18 million	$9.97	82.04
Orchid Island Capital	-$21.38 million	-20.22	-$39.23 million	($0.53)	-15.40

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

Profitability

This table compares Equinix and Orchid Island Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equinix	12.24%	8.46%	3.21%
Orchid Island Capital	N/A	-6.36%	-0.68%

Dividends

Equinix pays an annual dividend of $17.04 per share and has a dividend yield of 2.1%. Orchid Island Capital pays an annual dividend of $1.44 per share and has a dividend yield of 17.6%. Equinix pays out 170.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Orchid Island Capital pays out -271.7% of its earnings in the form of a dividend. Orchid Island Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Equinix beats Orchid Island Capital on 11 of the 16 factors compared between the two stocks.

About Equinix

Equinix (Nasdaq: EQIX) is the world's digital infrastructure company . Digital leaders harness Equinix's trusted platform to bring together and interconnect foundational infrastructure at software speed. Equinix enables organizations to access all the right places, partners and possibilities to scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value, while supporting their sustainability goals.

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.