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PennyMac Financial Services, Inc. (PFSI) vs Velocity Financial, Inc. (VEL)

PennyMac Financial Services, Inc. and Velocity Financial, Inc. are both Mortgage Finance companies. PennyMac Financial Services, Inc. is the larger, with a market value of $3.2B against $584.7M — 5.4× the size. Velocity Financial, Inc. trades at the lower P/E: 5.3× against 8.0×. Velocity Financial, Inc. grew revenue faster over the last twelve months: 32.4% against 25.9%. PennyMac Financial Services, Inc. has the higher net margin (17.7% vs 0.00%) and the higher return on invested capital (2.17% vs 0.00%). Across the 19 metrics below, Velocity Financial, Inc. leads on 10 and PennyMac Financial Services, Inc. on 9.

Valuation

Metric PFSI VEL Mortgage Finance median
P/E 7.98 5.33 6.65
P/S 1.42 1.82 1.42
P/B 0.72 0.79 0.46
Price to free cash flow n/m 6.32 6.32
EV/EBITDA — — —
EV/Sales — — —
Earnings yield 12.53% 18.76% 2.41%
Free cash flow yield (59.28%) 15.83% (19.29%)

Profitability

Metric PFSI VEL Mortgage Finance median
Gross margin 78.95% 0.00% 84.40%
Operating margin 27.59% 0.00% 12.51%
Net margin 17.73% 0.00% (0.83%)
Free cash flow margin (83.74%) 0.00% (45.06%)
Return on equity 9.38% 16.02% (1.16%)
Return on assets 1.45% 1.47% 0.38%
Return on invested capital 2.17% 0.00% 0.36%

Growth

Metric PFSI VEL Mortgage Finance median
Revenue growth (TTM) 25.90% 32.40% 11.44%
EPS growth (last fiscal year) 59.25% 43.98% 6.60%
Revenue growth, 5-year CAGR (11.20%) 20.68% (11.16%)
Net income growth, 5-year CAGR (21.18%) 0.00% 0.00%

Health

Metric PFSI VEL Mortgage Finance median
Debt to equity 3.22 9.29 1.22
Current ratio 0.38 42.53 1.38
Net debt to EBITDA 18.29 28.41 9.85

Dividend

Metric PFSI VEL Mortgage Finance median
Dividend yield 1.99% — 8.31%
Payout ratio 0.16 — —

Size

Metric PFSI VEL Mortgage Finance median
Market cap 3.18b 584.72m 198.15m

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