Federal National Mortgage Association (OTCMKTS:FNMA) versus Freddie Mac (OTC:FMCC) Head to Head Survey

Federal National Mortgage Association (OTCMKTS:FNMA) and Freddie Mac (OTC:FMCC) are both mid-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, risk, profitability, institutional ownership, valuation and analyst recommendations.

Profitability

This table compares Federal National Mortgage Association and Freddie Mac’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Federal National Mortgage Association	11.22%	-30.10%	0.39%
Freddie Mac	9.74%	-33.18%	0.35%

Risk & Volatility

Federal National Mortgage Association has a beta of 1.98, indicating that its share price is 98% more volatile than the S&P 500. Comparatively, Freddie Mac has a beta of 2.09, indicating that its share price is 109% more volatile than the S&P 500.

Valuation & Earnings

This table compares Federal National Mortgage Association and Freddie Mac”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Federal National Mortgage Association	$139.99 billion	0.05	$17.41 billion	N/A	N/A
Freddie Mac	$108.05 billion	0.04	$10.54 billion	($0.06)	-101.98

Federal National Mortgage Association has higher revenue and earnings than Freddie Mac.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Federal National Mortgage Association and Freddie Mac, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Federal National Mortgage Association	2	0	0	0	1.00
Freddie Mac	0	0	0	0	0.00

Federal National Mortgage Association presently has a consensus target price of $4.00, suggesting a potential downside of 39.39%. Given Federal National Mortgage Association’s stronger consensus rating and higher probable upside, equities analysts clearly believe Federal National Mortgage Association is more favorable than Freddie Mac.

Institutional & Insider Ownership

0.0% of Federal National Mortgage Association shares are owned by institutional investors. 1.0% of Federal National Mortgage Association shares are owned by company insiders. Comparatively, 0.1% of Freddie Mac shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Federal National Mortgage Association beats Freddie Mac on 10 of the 11 factors compared between the two stocks.

About Federal National Mortgage Association

Federal National Mortgage Association provides financing solutions for mortgages in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment securitizes and purchases single-family fixed-rate or adjustable-rate, first-lien mortgage loans, or mortgage-related securities backed by these loans; and loans that are insured by Federal Housing Administration, loans guaranteed by the Department of Veterans Affairs and Rural Development Housing and Community Facilities Program of the U.S. Department of Agriculture, manufactured housing mortgage loans, and other mortgage-related securities. The Multifamily segment securitizes multifamily mortgage loans into Fannie Mae mortgage backed securities (MBS); purchases multifamily mortgage loans; and provides credit enhancement for bonds issued by state and local housing finance authorities to finance multifamily housing. This segment also issues structured MBS backed by Fannie Mae multifamily MBS; buys and sells multifamily agency mortgage-backed securities; and invests in low-income housing tax credit multifamily projects. Federal National Mortgage Association was founded in 1938 and is based in Washington, the District of Columbia.

About Freddie Mac

Federal Home Loan Mortgage Corporation operates in the secondary mortgage market in the United States. The company purchases single-family and multifamily residential mortgage loans originated by lenders, as well as invests in mortgage loans and mortgage-related securities. It operates through two segments, Single-family and Multifamily. The Single-family segment purchases, securitizes, and guarantees single-family loans; and manages single-family mortgage credit risk, as well as manages mortgage-related investments portfolio, single-family securitization activities, and treasury functions. This segment serves mortgage banking companies, commercial banks, regional banks, community banks, credit unions, housing finance agencies, savings institutions, and non-depository financial institutions. The Multifamily segment engages in the purchase, sale, securitization, and guarantee of multifamily loans and securities through the issuance of multifamily K and SB certificates; issuing and guarantying other securitization products; issuing other credit risk transfer products; and provision of other mortgage-related guarantees. It serves banks and other depository institutions, insurance companies, money managers, central banks, pension funds, state and local governments, real estate investment trusts, brokers and dealers, and a range of lenders. The company was founded in 1970 and is headquartered in McLean, Virginia.