Reviewing Essex Property Trust (ESS) & Ready Capital (RC)

Essex Property Trust (NYSE:ESS) and Ready Capital (NYSE:RC) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.

Earnings and Valuation

This table compares Essex Property Trust and Ready Capital’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Essex Property Trust $1.36 billion 11.76 $433.05 million $11.91 20.39
Ready Capital $138.30 million 3.65 $43.29 million $1.42 11.11

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

Insider and Institutional Ownership

96.2% of Essex Property Trust shares are owned by institutional investors. Comparatively, 32.2% of Ready Capital shares are owned by institutional investors. 3.4% of Essex Property Trust shares are owned by insiders. Comparatively, 2.5% of Ready Capital shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Essex Property Trust and Ready Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Essex Property Trust 27.05% 5.52% 2.83%
Ready Capital 33.24% 9.68% 2.07%

Dividends

Essex Property Trust pays an annual dividend of $7.44 per share and has a dividend yield of 3.1%. Ready Capital pays an annual dividend of $1.60 per share and has a dividend yield of 10.1%. Essex Property Trust pays out 62.5% of its earnings in the form of a dividend. Ready Capital pays out 112.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Essex Property Trust has raised its dividend for 24 consecutive years.

Risk & Volatility

Essex Property Trust has a beta of 0.29, indicating that its stock price is 71% less volatile than the S&P 500. Comparatively, Ready Capital has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Essex Property Trust and Ready Capital, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Essex Property Trust 0 9 13 0 2.59
Ready Capital 0 4 3 0 2.43

Essex Property Trust currently has a consensus price target of $263.24, indicating a potential upside of 8.42%. Ready Capital has a consensus price target of $17.30, indicating a potential upside of 9.70%. Given Ready Capital’s higher possible upside, analysts plainly believe Ready Capital is more favorable than Essex Property Trust.

Summary

Essex Property Trust beats Ready Capital on 12 of the 17 factors compared between the two stocks.

About Essex Property Trust

Essex Property Trust, Inc., an S&P 500 company, is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets. The Company currently has ownership interests in 247 apartment communities comprising approximately 60,000 apartment homes, excluding six properties in various stages of active development, one commercial building, preferred equity co-investments, and loan investments.

About Ready Capital

Ready Capital Corp., a real estate investment trust, acquires, originates, manages and finances commercial mortgage real estate loans or SBC loans and real estate-related securities in the US. Its SBC loans in the range of $500,000 to $10 million.

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