Invesco Mortgage Capital Inc. (NYSE: IVR)

Sector: Real Estate Industry: REIT - Mortgage CIK: 0001437071
Market Cap 611.45 Mn
P/B 0.79
P/E 17.74
P/S 8.48
ROIC (Qtr) 0.95
Div Yield % 21.10
Rev 1y % (Qtr) 27.58
Total Debt (Qtr) 5.15 Bn
Debt/Equity (Qtr) 6.69

About

Invesco Mortgage Capital Inc., or IVR, operates in the mortgage finance industry, a significant sector of the global financial market. The company's main business activities revolve around investing in, financing, and managing mortgage-backed securities (MBS) and other mortgage-related assets. IVR's operations span across various countries and regions, with a focus on residential and commercial mortgage-backed securities. The company generates revenue through its investment portfolio, which primarily consists of residential and commercial mortgage-backed...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 159.13M provides 8.47x coverage of SG&A expenses 18.78M, showing efficient operational cost management.
  • Strong free cash flow of 159.13M provides 8.47x coverage of SG&A expenses 18.78M, indicating efficient cost management.
  • Operating cash flow of 159.13M exceeds receivables of 29.02M by 5.48x, demonstrating excellent collection efficiency.
  • Cash position of 180.72M fully covers payables of 7.37M by 24.53x, showing strong vendor relationship management.
  • Free cash flow of 159.13M fully covers payables of 7.37M by 21.60x, indicating strong vendor payment capability.

Bear case

  • Operating cash flow of 159.13M provides thin coverage of dividend payments of (109.29M) with a -1.46 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 159.13M represents just -4.57x of debt issuance (34.80M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • R&D investment of 0 represents just 0x of SG&A expenses of 18.78M, indicating potential underinvestment in innovation relative to administrative overhead.
  • Other current assets of 0 provide weak coverage of payables of 7.37M, which is 0x, suggesting potential working capital stress in near term.
  • Equity issuance of 82.77M represents 2.40x of earnings 34.46M, suggesting concerning reliance on share issuance

Peer comparison

Companies in the REIT - Mortgage
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NLY Annaly Capital Management Inc 13.98 Bn 10.42 8.17 107.02 Bn
2 AGNC AGNC Investment Corp. 11.44 Bn 16.65 30.74 95.01 Bn
3 STWD Starwood Property Trust, Inc. 6.55 Bn 17.88 3.63 21.43 Bn
4 RITM Rithm Capital Corp. 5.78 Bn 7.43 1.16 34.97 Bn
5 BXMT Blackstone Mortgage Trust, Inc. 3.36 Bn 31.37 6.62 15.46 Bn
6 ARR Armour Residential REIT, Inc. 1.83 Bn 34.78 15.64 16.56 Bn
7 DX Dynex Capital Inc 1.59 Bn 9.04 6.88 11.75 Bn
8 ABR Arbor Realty Trust Inc 1.50 Bn 9.84 2.84 10.40 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.85 0.83
EV to Cash from Ops. EV/CFO 31.81 -102.96
EV to Debt EV to Debt 0.98 1.31
EV to EBIT EV/EBIT 94.99 -260.73
EV to EBITDA EV/EBITDA 94.99 -16.37
EV to Free Cash Flow [EV/FCF] EV/FCF 31.81 3.47
EV to Market Cap EV to Market Cap 8.21 9.18
EV to Revenue EV/Rev 70.24 26.77
Price to Book Value [P/B] P/B 0.80 0.68
Price to Earnings [P/E] P/E 17.89 -4.85
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.27 -0.55
Dividend Payout Ratio % Div Payout % (Qtr) 314.90 29.47
Dividend per Basic Share Div per Share (Qtr) 1.42 1.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 59.17 57.60
Interest Coverage Interest Coverage 0.00 -0.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % 0.00 37.60
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 7.28 24.22
Dividend Growth (1y) % Div 1y % (Qtr) -11.25 4.53
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -36.24 17.83
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -36.24 9.86
EBIT Growth (1y) % EBIT 1y % (Qtr) -36.24 20.98
EBT Growth (1y) % EBT 1y % (Qtr) -36.24 11.17
EPS Growth (1y) % EPS 1y % (Qtr) -63.57 59.25
FCF Growth (1y) % FCF 1y % (Qtr) 4.02 59.63
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -29.73 20.65
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.01 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.78 0.83
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 6.69 5.05
Interest Cover Ratio Interest Cover Ratio 0.00 -0.17
Times Interest Earned Times Interest Earned 0.00 -0.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 73.90 137.11
EBIT Margin % EBIT Margin % (Qtr) 73.95 142.19
EBT Margin % EBT Margin % (Qtr) 73.95 129.16
Gross Margin % Gross Margin % (Qtr) 100.00 117.97
Net Profit Margin % Net Margin % (Qtr) 47.80 125.89