Ready Capital (NYSE:RC – Get Free Report) and TPG RE Finance Trust (NYSE:TRTX – Get Free Report) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, risk, earnings, profitability, valuation, dividends and institutional ownership.
Insider & Institutional Ownership
55.9% of Ready Capital shares are owned by institutional investors. Comparatively, 57.1% of TPG RE Finance Trust shares are owned by institutional investors. 1.4% of Ready Capital shares are owned by insiders. Comparatively, 3.0% of TPG RE Finance Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Analyst Ratings
This is a summary of current ratings and target prices for Ready Capital and TPG RE Finance Trust, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ready Capital | 2 | 3 | 0 | 0 | 1.60 |
| TPG RE Finance Trust | 0 | 2 | 4 | 0 | 2.67 |
Profitability
This table compares Ready Capital and TPG RE Finance Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ready Capital | -131.76% | -16.78% | -3.43% |
| TPG RE Finance Trust | 17.03% | 6.85% | 1.66% |
Risk and Volatility
Ready Capital has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500. Comparatively, TPG RE Finance Trust has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500.
Valuation & Earnings
This table compares Ready Capital and TPG RE Finance Trust”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ready Capital | $569.17 million | 0.49 | -$228.91 million | ($3.47) | -0.49 |
| TPG RE Finance Trust | $142.63 million | 4.25 | $60.32 million | $0.54 | 14.61 |
TPG RE Finance Trust has lower revenue, but higher earnings than Ready Capital. Ready Capital is trading at a lower price-to-earnings ratio than TPG RE Finance Trust, indicating that it is currently the more affordable of the two stocks.
Dividends
Ready Capital pays an annual dividend of $0.04 per share and has a dividend yield of 2.4%. TPG RE Finance Trust pays an annual dividend of $0.96 per share and has a dividend yield of 12.2%. Ready Capital pays out -1.2% of its earnings in the form of a dividend. TPG RE Finance Trust pays out 177.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Summary
TPG RE Finance Trust beats Ready Capital on 12 of the 16 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 TPG RE Finance Trust
TPG RE Finance Trust, Inc., a commercial real estate finance company, originates, acquires, and manages commercial mortgage loans and other commercial real estate-related debt instruments in the United States. It invests in commercial mortgage loans; subordinate mortgage interests, mezzanine loans, secured real estate securities, note financing, preferred equity, and miscellaneous debt instruments; and commercial real estate collateralized loan obligations and commercial mortgage-backed securities secured by properties primarily in the multifamily, life science, mixed-use, hospitality, self storage, industrial, and retail real estate sectors. 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. TPG RE Finance Trust, Inc. was incorporated in 2014 and is based in New York, New York.
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