Resource Capital (NYSE: RSO) and Equity One (NYSE:EQY) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.
Valuation & Earnings
This table compares Resource Capital and Equity One’s top-line revenue, earnings per share (EPS) and valuation.
||Earnings Per Share
Resource Capital has higher revenue and earnings than Equity One. Resource Capital is trading at a lower price-to-earnings ratio than Equity One, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Resource Capital has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500. Comparatively, Equity One has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.
This table compares Resource Capital and Equity One’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
Resource Capital pays an annual dividend of $0.20 per share and has a dividend yield of 2.1%. Equity One pays an annual dividend of $0.72 per share and has a dividend yield of 2.3%. Resource Capital pays out 105.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Equity One pays out 146.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Insider & Institutional Ownership
52.6% of Resource Capital shares are held by institutional investors. Comparatively, 64.0% of Equity One shares are held by institutional investors. 4.8% of Resource Capital shares are held by insiders. Comparatively, 35.9% of Equity One shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This is a summary of current ratings and recommmendations for Resource Capital and Equity One, as reported by MarketBeat.
||Strong Buy Ratings
Resource Capital presently has a consensus target price of $11.50, suggesting a potential upside of 20.80%. Given Resource Capital’s higher probable upside, research analysts plainly believe Resource Capital is more favorable than Equity One.
Equity One beats Resource Capital on 7 of the 13 factors compared between the two stocks.
Resource Capital Company Profile
Resource Capital Corp. is a real estate finance company. The Company operates through four segments: Commercial Real Estate Debt Investments, Commercial Finance, Residential Mortgage Lending and Corporate & Other. The Commercial Real Estate Debt Investments segment includes the Company’s activities and operations related to commercial real estate loans, commercial real estate-related securities and investments in real estate. The Commercial Finance segment includes the Company’s activities and operations related to syndicated corporate loans, syndicated corporate loan-related securities and direct financing leases. The Residential Mortgage Lending segment includes the Company’s activities and operations related to the investment in residential mortgage-backed securities (RMBS).
Equity One Company Profile
Equity One, Inc. is a real estate investment trust (REIT). The Company owns, manages, acquires, develops and redevelops shopping centers and retail properties located in supply constrained suburban and urban communities. As of December 31, 2016, the Company’s portfolio consisted of 122 properties, including 101 retail properties and five non-retail properties totaling approximately 12.8 million square feet of gross leasable area (GLA), 10 development or redevelopment properties with approximately 2.3 million square feet of GLA, and six land parcels. Its retail occupancy excluding developments and redevelopments was 95.8% and included national, regional and local tenants as of December 31, 2016. In addition, the Company had joint venture interests in six retail properties and two office buildings totaling approximately 1.4 million square feet of GLA as of December 31, 2016.
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