Ready Capital (NYSE:RC – Get Free Report) and Federal Realty Investment Trust (NYSE:FRT – Get Free Report) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, analyst recommendations, risk, dividends and valuation.
Valuation and Earnings
This table compares Ready Capital and Federal Realty Investment Trust”s 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 | 14.22 | $339.45 million | ($0.70) | -9.78 |
| Federal Realty Investment Trust | $1.20 billion | 7.52 | $295.21 million | $3.43 | 30.77 |
Ready Capital has higher earnings, but lower revenue than Federal Realty Investment Trust. Ready Capital is trading at a lower price-to-earnings ratio than Federal Realty Investment Trust, indicating that it is currently the more affordable of the two stocks.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Ready Capital | -11.65% | 7.53% | 1.49% |
| Federal Realty Investment Trust | 24.38% | 9.89% | 3.48% |
Risk & Volatility
Ready Capital has a beta of 1.43, meaning that its stock price is 43% more volatile than the S&P 500. Comparatively, Federal Realty Investment Trust has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.
Institutional & Insider Ownership
55.9% of Ready Capital shares are owned by institutional investors. Comparatively, 93.9% of Federal Realty Investment Trust shares are owned by institutional investors. 1.1% of Ready Capital shares are owned by company insiders. Comparatively, 1.0% of Federal Realty Investment Trust shares 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.
Dividends
Ready Capital pays an annual dividend of $1.00 per share and has a dividend yield of 14.6%. Federal Realty Investment Trust pays an annual dividend of $4.40 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. Federal Realty Investment Trust pays out 128.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federal Realty Investment Trust has raised its dividend for 58 consecutive years. Ready Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a summary of current ratings and target prices for Ready Capital and Federal Realty Investment Trust, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ready Capital | 1 | 6 | 1 | 0 | 2.00 |
| Federal Realty Investment Trust | 0 | 2 | 11 | 0 | 2.85 |
Ready Capital presently has a consensus target price of $8.61, suggesting a potential upside of 25.74%. Federal Realty Investment Trust has a consensus target price of $122.54, suggesting a potential upside of 16.11%. Given Ready Capital’s higher possible upside, equities research analysts plainly believe Ready Capital is more favorable than Federal Realty Investment Trust.
Summary
Federal Realty Investment Trust beats Ready Capital on 10 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 Federal Realty Investment Trust
Federal Realty Investment Trust is an equity real estate investment trust, which engages in the provision of ownership, management, and redevelopment of retail and mixed-use properties located primarily in communities where demand exceeds supply in strategically selected metropolitan markets. The company was founded in 1962 and is headquartered in North Bethesda, MD.
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