RAIT Financial Trust (NYSE: RAS) and Cousins Properties (NYSE:CUZ) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.
RAIT Financial Trust pays an annual dividend of $0.20 per share and has a dividend yield of 64.5%. Cousins Properties pays an annual dividend of $0.24 per share and has a dividend yield of 2.6%. RAIT Financial Trust pays out -11.1% of its earnings in the form of a dividend. Cousins Properties pays out 44.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. RAIT Financial Trust has raised its dividend for 3 consecutive years. RAIT Financial Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares RAIT Financial Trust and Cousins Properties’ net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
|RAIT Financial Trust
Risk & Volatility
RAIT Financial Trust has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500. Comparatively, Cousins Properties has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500.
This is a breakdown of recent ratings for RAIT Financial Trust and Cousins Properties, as provided by MarketBeat.
||Strong Buy Ratings
|RAIT Financial Trust
RAIT Financial Trust currently has a consensus price target of $1.43, indicating a potential upside of 359.68%. Cousins Properties has a consensus price target of $10.13, indicating a potential upside of 10.53%. Given RAIT Financial Trust’s higher possible upside, research analysts clearly believe RAIT Financial Trust is more favorable than Cousins Properties.
Institutional & Insider Ownership
51.8% of RAIT Financial Trust shares are owned by institutional investors. 1.3% of RAIT Financial Trust shares are owned by insiders. Comparatively, 1.1% of Cousins Properties shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares RAIT Financial Trust and Cousins Properties’ top-line revenue, earnings per share (EPS) and valuation.
||Earnings Per Share
|RAIT Financial Trust
Cousins Properties has higher revenue and earnings than RAIT Financial Trust. RAIT Financial Trust is trading at a lower price-to-earnings ratio than Cousins Properties, indicating that it is currently the more affordable of the two stocks.
Cousins Properties beats RAIT Financial Trust on 9 of the 16 factors compared between the two stocks.
RAIT Financial Trust Company Profile
RAIT Financial Trust (RAIT) is a real estate investment trust (REIT). The Company focuses on providing commercial real estate (CRE) financing throughout the United States. The core of its business is a full service CRE lending platform focused on first lien loans. It offers customized lending solutions to meet borrower needs and internal credit goals. It offers personalized middle-market financing solutions and a complement of lending products for CRE. The Company may also offer mezzanine loans and preferred equity interests in limited circumstances to support first lien loans. It is engaged in floating rate securitization programs and has access to multiple sources of funding, including senior debt, convertible securities, preferred securities and common securities. The Company also owns and manages a portfolio of CRE properties, and manages real estate assets for third parties. The Company is engaged in lending, owning and managing CRE assets throughout the United States.
Cousins Properties Company Profile
Cousins Properties Incorporated is a self-administered and self-managed real estate investment trust. The Company’s segments include Office, Mixed-Use, Other, Atlanta, Austin, Charlotte, Orlando, Tampa, Phoenix and Other. It develops, acquires, leases, manages and owns primarily Class A office properties and opportunistic mixed-use developments in Sunbelt markets with a focus on Georgia, Texas and North Carolina. It manages a 15.8 million-square-foot trophy office portfolio in the Sun Belt markets of Atlanta, Austin, Charlotte, Orlando, Tampa and Tempe. As of December 31, 2016, its portfolio of real estate assets consisted of interests in 16.2 million square feet of office space and 786,000 square feet of mixed-use space. The Company, through Cousins TRS Services LLC, owns and manages its own real estate portfolio and performs certain real estate related services for other parties. Its properties include Colorado Tower, 816 Congress, Promenade and Gateway Village.
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