Analyzing Ready Capital (RC) & The Competition

Ready Capital (NYSE: RC) is one of 242 public companies in the “Real estate investment trusts” industry, but how does it compare to its competitors? We will compare Ready Capital to similar companies based on the strength of its earnings, analyst recommendations, institutional ownership, profitability, dividends, risk and valuation.

Dividends

Ready Capital pays an annual dividend of $1.60 per share and has a dividend yield of 11.0%. Ready Capital pays out 112.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Real estate investment trusts” companies pay a dividend yield of 4.5% and pay out 71.7% of their earnings in the form of a dividend.

Profitability

This table compares Ready Capital and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ready Capital 33.24% 9.68% 2.07%
Ready Capital Competitors 24.82% 6.24% 2.77%

Earnings & Valuation

This table compares Ready Capital and its competitors revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Ready Capital $138.30 million $43.29 million 10.25
Ready Capital Competitors $797.32 million $183.70 million 14.94

Ready Capital’s competitors have higher revenue and earnings than Ready Capital. Ready Capital 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.

Insider and Institutional Ownership

31.8% of Ready Capital shares are owned by institutional investors. Comparatively, 72.4% of shares of all “Real estate investment trusts” companies are owned by institutional investors. 1.0% of Ready Capital shares are owned by company insiders. Comparatively, 7.0% of shares of all “Real estate investment trusts” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Ready Capital has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Ready Capital’s competitors have a beta of 0.57, indicating that their average share price is 43% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Ready Capital and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ready Capital 0 2 5 0 2.71
Ready Capital Competitors 2089 9233 9446 263 2.37

Ready Capital currently has a consensus price target of $17.30, suggesting a potential upside of 18.82%. As a group, “Real estate investment trusts” companies have a potential upside of 9.01%. Given Ready Capital’s stronger consensus rating and higher probable upside, research analysts clearly believe Ready Capital is more favorable than its competitors.

Summary

Ready Capital competitors beat Ready Capital on 8 of the 15 factors compared.

Ready Capital Company Profile

Ready Capital Corporation operates as a real estate finance company. The company acquires, originates, manages, services, and finances small balance commercial (SBC) loans, small business administration (SBA) loans, residential mortgage loans, and mortgage backed securities collateralized primarily by SBC loans, or other real estate-related investments. It operates through four segments: Loan Acquisitions; SBC Originations; SBA Originations, Acquisitions and Servicing; and Residential Mortgage Banking. The Loan Acquisitions segment acquires performing and non-performing SBC loans. The SBC Originations segment originates SBC loans secured by stabilized or transitional investor properties using various loan origination channels; and originates and services multi-family loan products. The SBA Originations, Acquisitions and Servicing segment acquires, originates, and services owner-occupied loans guaranteed by the SBA. The Residential Mortgage Banking segment originates residential mortgage loans through retail, correspondent, and broker channels. The company qualifies as a REIT for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as Sutherland Asset Management Corporation and changed its name to Ready Capital Corporation in September 2018. Ready Capital Corporation was founded in 2007 and is headquartered in New York, New York.

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