Ready Capital (NYSE:RC) and Lexington Realty Trust (NYSE:LXP) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.
This is a summary of recent recommendations for Ready Capital and Lexington Realty Trust, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Lexington Realty Trust||0||1||3||0||2.75|
Valuation and Earnings
This table compares Ready Capital and Lexington Realty Trust’s gross 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||2.04||$59.26 million||$1.76||8.28|
|Lexington Realty Trust||$395.34 million||5.45||$227.41 million||$0.96||9.55|
Lexington Realty Trust has higher revenue and earnings than Ready Capital. Ready Capital is trading at a lower price-to-earnings ratio than Lexington Realty Trust, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
36.9% of Ready Capital shares are owned by institutional investors. Comparatively, 85.3% of Lexington Realty Trust shares are owned by institutional investors. 2.5% of Ready Capital shares are owned by company insiders. Comparatively, 3.3% of Lexington Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Ready Capital pays an annual dividend of $1.60 per share and has a dividend yield of 11.0%. Lexington Realty Trust pays an annual dividend of $0.41 per share and has a dividend yield of 4.5%. 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. Lexington Realty Trust pays out 42.7% of its earnings in the form of a dividend. Lexington Realty Trust has increased its dividend for 8 consecutive years.
This table compares Ready Capital and Lexington Realty Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Lexington Realty Trust||72.14%||21.72%||8.54%|
Risk & Volatility
Ready Capital has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, Lexington Realty Trust has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.
Lexington Realty Trust beats Ready Capital on 13 of the 17 factors compared between the two stocks.
Ready Capital Company Profile
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.
Lexington Realty Trust Company Profile
Lexington Realty Trust (NYSE: LXP) is a publicly traded real estate investment trust (REIT) that owns a diversified portfolio of real estate assets consisting primarily of equity investments in single-tenant net-leased commercial properties across the United States. Lexington seeks to expand its industrial portfolio through build-to-suit transactions, sale-leaseback transactions and other transactions, including acquisitions.
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