Head to Head Review: Ready Capital (RC) and Mid-America Apartment Communities (MAA)

Ready Capital (NYSE:RC) and Mid-America Apartment Communities (NYSE:MAA) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, analyst recommendations, valuation and profitability.

Analyst Ratings

This is a summary of current ratings and price targets for Ready Capital and Mid-America Apartment Communities, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ready Capital 0 2 5 0 2.71
Mid-America Apartment Communities 0 7 6 0 2.46

Ready Capital presently has a consensus price target of $17.17, indicating a potential upside of 16.54%. Mid-America Apartment Communities has a consensus price target of $108.59, indicating a potential downside of 4.18%. Given Ready Capital’s stronger consensus rating and higher probable upside, analysts plainly believe Ready Capital is more favorable than Mid-America Apartment Communities.

Profitability

This table compares Ready Capital and Mid-America Apartment Communities’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ready Capital 31.79% 8.73% 1.78%
Mid-America Apartment Communities 14.86% 3.68% 2.07%

Insider & Institutional Ownership

35.6% of Ready Capital shares are owned by institutional investors. Comparatively, 93.3% of Mid-America Apartment Communities shares are owned by institutional investors. 2.5% of Ready Capital shares are owned by company insiders. Comparatively, 1.3% of Mid-America Apartment Communities shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Ready Capital pays an annual dividend of $1.60 per share and has a dividend yield of 10.8%. Mid-America Apartment Communities pays an annual dividend of $3.84 per share and has a dividend yield of 3.4%. Ready Capital pays out 90.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mid-America Apartment Communities pays out 63.6% of its earnings in the form of a dividend. Mid-America Apartment Communities has raised its dividend for 8 consecutive years.

Valuation & Earnings

This table compares Ready Capital and Mid-America Apartment Communities’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ready Capital $317.42 million 1.50 $59.26 million $1.76 8.41
Mid-America Apartment Communities $1.57 billion 8.22 $222.90 million $6.04 18.76

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

Risk & Volatility

Ready Capital has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Mid-America Apartment Communities has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500.

Summary

Mid-America Apartment Communities 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. The company originates, acquires, finances, and services small balance commercial (SBC) loans, small business administration (SBA) loans, and residential mortgage loans, as well as 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 real estate investment trust 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.

About Mid-America Apartment Communities

MAA, an S&P 500 company, is a real estate investment trust, or REIT, focused on delivering full-cycle and superior investment performance for shareholders through the ownership, management, acquisition, development and redevelopment of quality apartment communities in the Southeast, Southwest, and Mid-Atlantic regions of the United States. As of December 31, 2018, MAA had ownership interest in 101,441 apartment units, including communities currently in development, across 17 states and the District of Columbia.

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