SRH Total Return Fund vs Farmer Mac

This page compares SRH Total Return Fund Inc and Farmer Mac, examining their business models, financial performance, and market context. It presents objective analysis of strategies, risk considerations, and potential implications for investors, without making predictions. The aim is to inform through clear, accessible information that supports understanding rather than advice. Educational content, not financial advice.

Comparison Snapshot

Key Financial Metrics

STEW

Metric

AGM

$1.73B

Market Cap

$1.78B

N/A

Potential Profit

30.00%

N/A

Analyst Rating

Buy

Investment Analysis

SRH Total Return Fund

STEW

Pros

SRH Total Return Fund offers a low price-to-earnings ratio, making it attractively valued compared to broader equity markets.
The fund has delivered strong long-term annualised returns, outperforming its benchmark over multiple time horizons.
It maintains a significant allocation to high-quality, dividend-paying value stocks, including a large position in Berkshire Hathaway.

Considerations

The fund is non-diversified, with over 40% of its portfolio concentrated in a single holding, increasing risk.
Its dividend yield is below average for closed-end funds, limiting income appeal relative to peers.
The fund's performance is highly dependent on the success of its value-oriented strategy, which may underperform in growth-led markets.

Farmer Mac

AGM

Pros

Farmer Mac benefits from a stable business model focused on agricultural mortgage finance, supported by government-backed programs.
The company maintains a strong balance sheet with low leverage and high interest coverage, supporting financial resilience.
Farmer Mac has demonstrated consistent profitability and efficient operations in its core agricultural lending segment.

Considerations

The company's earnings are sensitive to agricultural commodity prices and rural economic conditions, creating cyclical risk.
Farmer Mac faces regulatory scrutiny and potential changes in government policy affecting its mortgage guarantee activities.
Its growth prospects are limited by the size and maturity of the US agricultural lending market.

About The Companies

SRH Total Return Fund (STEW)

SRH Total Return Fund, Inc. (ticker: STEW) is a non-diversified, closed-end investment fund. Its primary objective is to achieve a total return, which combines potential capital growth and income from its investments. The fund is known for its highly flexible investment strategy, allowing it to invest in both equity and fixed-income securities of domestic and international companies of any size. This means it isn't restricted by geography or market capitalisation. The fund's sub-adviser aims to keep portfolio turnover low to help minimise trading costs. Its portfolio often includes well-known companies such as Berkshire Hathaway, Microsoft, and JPMorgan Chase & Co. It's important to remember that as an investment, its value can fall as well as rise, and returns are not guaranteed. The fund is managed by investment adviser Paralel Advisors LLC.

Farmer Mac (AGM)

Federal Agricultural Mortgage Corporation, often known as 'Farmer Mac', is a unique entity in the US financial landscape. It's a stockholder-owned company but was chartered by the U.S. Congress to establish a secondary market for agricultural and rural loans. Its mission is to increase the availability of long-term credit for American farmers, ranchers, and rural communities. Farmer Mac achieves this by purchasing eligible loans from lenders, which provides them with liquidity to make new loans. Its business is diversified across several segments, including traditional farm and ranch loans, corporate agribusiness finance, renewable energy projects, and rural utilities like power and broadband. For investors, it represents a specialised way to gain exposure to the financial health and development of rural America. As with any investment, its value can rise and fall and returns are not guaranteed.

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6% Interest on Cash

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Comparison Snapshot