Financial Survey: Public Storage (NYSE:PSA) versus Ready Capital (NYSE:RC)

Ready Capital (NYSE:RC) and Public Storage (NYSE:PSA) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, risk, valuation and dividends.

Profitability

This table compares Ready Capital and Public Storage’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ready Capital	-11.65%	7.53%	1.49%
Public Storage	40.54%	34.07%	9.60%

Dividends

Ready Capital pays an annual dividend of $1.00 per share and has a dividend yield of 15.3%. Public Storage pays an annual dividend of $12.00 per share and has a dividend yield of 4.2%. Ready Capital pays out -142.9% of its earnings in the form of a dividend. Public Storage pays out 124.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ready Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Ready Capital and Public Storage”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ready Capital	$81.15 million	13.60	$339.45 million	($0.70)	-9.36
Public Storage	$4.68 billion	10.80	$2.15 billion	$9.63	29.97

Public Storage has higher revenue and earnings than Ready Capital. Ready Capital is trading at a lower price-to-earnings ratio than Public Storage, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Ready Capital has a beta of 1.43, indicating that its stock price is 43% more volatile than the S&P 500. Comparatively, Public Storage has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.

Insider and Institutional Ownership

55.9% of Ready Capital shares are held by institutional investors. Comparatively, 78.8% of Public Storage shares are held by institutional investors. 1.1% of Ready Capital shares are held by insiders. Comparatively, 11.0% of Public Storage shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Ready Capital and Public Storage, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ready Capital	1	6	1	0	2.00
Public Storage	0	7	5	2	2.64

Ready Capital presently has a consensus price target of $8.82, indicating a potential upside of 34.68%. Public Storage has a consensus price target of $346.00, indicating a potential upside of 19.87%. Given Ready Capital’s higher possible upside, analysts plainly believe Ready Capital is more favorable than Public Storage.

Summary

Public Storage beats Ready Capital on 12 of the 17 factors compared between the two stocks.

About Ready Capital

Ready Capital Corporation operates as a real estate finance company in the United States. It operates through two segments: LMM Commercial Real Estate and Small Business Lending. The company originates, acquires, finances, and services lower-to-middle-market (LLM) commercial real estate loans, small business administration (SBA) loans, residential mortgage loans, construction loans, and mortgage-backed securities collateralized primarily by LLM loans, or other real estate-related investments. The LMM Commercial Real Estate segment originates LLM loans across the full life-cycle of an LLM property, including construction, bridge, stabilized, and agency loan origination channels. The Small Business Lending segment acquires, originates, and services owner-occupied loans guaranteed by the SBA under its SBA Section 7(a) Program; and acquires purchased future receivables. The company has elected to be taxed as a real estate investment trust (REIT) and 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.

About Public Storage

Public Storage, a member of the S&P 500 and FT Global 500, is a REIT that primarily acquires, develops, owns, and operates self-storage facilities. At December 31, 2023, we had: (i) interests in 3,044 self-storage facilities located in 40 states with approximately 218 million net rentable square feet in the United States and (ii) a 35% common equity interest in Shurgard Self Storage Limited (Euronext Brussels: SHUR), which owned 275 self-storage facilities located in seven Western European nations with approximately 15 million net rentable square feet operated under the Shurgard brand. Our headquarters are located in Glendale, California.