Drive Shack (DS) versus The Competition Financial Contrast

Drive Shack (NYSE: DS) is one of 16 publicly-traded companies in the “Specialized REITs” industry, but how does it contrast to its competitors? We will compare Drive Shack to related businesses based on the strength of its dividends, profitability, valuation, earnings, analyst recommendations, institutional ownership and risk.

Institutional and Insider Ownership

41.8% of Drive Shack shares are owned by institutional investors. Comparatively, 64.6% of shares of all “Specialized REITs” companies are owned by institutional investors. 7.2% of Drive Shack shares are owned by insiders. Comparatively, 6.4% of shares of all “Specialized REITs” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Drive Shack has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500. Comparatively, Drive Shack’s competitors have a beta of 0.85, indicating that their average stock price is 15% less volatile than the S&P 500.

Dividends

Drive Shack pays an annual dividend of $0.24 per share and has a dividend yield of 6.5%. Drive Shack pays out -68.6% of its earnings in the form of a dividend. As a group, “Specialized REITs” companies pay a dividend yield of 4.3% and pay out 170.4% of their earnings in the form of a dividend. Drive Shack is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Drive Shack and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Drive Shack 0 1 0 0 2.00
Drive Shack Competitors 26 210 552 20 2.70

Drive Shack currently has a consensus price target of $3.75, suggesting a potential upside of 1.08%. As a group, “Specialized REITs” companies have a potential upside of 12.43%. Given Drive Shack’s competitors stronger consensus rating and higher probable upside, analysts plainly believe Drive Shack has less favorable growth aspects than its competitors.

Earnings and Valuation

This table compares Drive Shack and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Drive Shack $292.74 million $8.22 million -10.60
Drive Shack Competitors $1.00 billion $531.02 million 28.89

Drive Shack’s competitors have higher revenue and earnings than Drive Shack. Drive Shack is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Drive Shack and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Drive Shack -7.05% 25.92% 3.08%
Drive Shack Competitors 36.41% 8.84% 3.25%

Summary

Drive Shack competitors beat Drive Shack on 10 of the 15 factors compared.

About Drive Shack

Drive Shack Inc., formerly Newcastle Investment Corp., is a leisure company. The Company is an owner and operator of golf-related leisure and entertainment businesses. The Company’s portfolio consists of Drive Shack, which is engaged in developing nationwide network of golf entertainment venues; American Golf Corporation, which is a golf course company, and real estate-related assets. American Golf Corporation operates approximately 90 private, resort and public golf courses throughout the United States. It has a range of public and private golf courses in California, New York, and Georgia. It operates multiple facilities that provide golf, tennis, swimming and spa facilities, among others. Its online Pro Shop offers a range of golf gifts, such as personalized golf balls, golf luggage and accessories. Its public golf courses equipped with practice areas, golf shops, driving ranges, and food and beverage options.

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