Equity Lifestyle Properties (NYSE:ELS) versus Ready Capital (NYSE:RC) Head-To-Head Comparison

Equity Lifestyle Properties (NYSE:ELS) and Ready Capital (NYSE:RC) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.

Valuation and Earnings

This table compares Equity Lifestyle Properties and Ready Capital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Equity Lifestyle Properties $1.04 billion 9.48 $279.14 million $2.09 25.83
Ready Capital $229.92 million 1.79 $72.97 million $1.54 5.13

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

Institutional and Insider Ownership

91.7% of Equity Lifestyle Properties shares are held by institutional investors. Comparatively, 46.9% of Ready Capital shares are held by institutional investors. 4.9% of Equity Lifestyle Properties shares are held by company insiders. Comparatively, 1.8% of Ready Capital shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Equity Lifestyle Properties and Ready Capital, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equity Lifestyle Properties 0 2 1 0 2.33
Ready Capital 0 1 3 0 2.75

Equity Lifestyle Properties currently has a consensus price target of $73.33, indicating a potential upside of 35.85%. Ready Capital has a consensus price target of $16.88, indicating a potential upside of 113.61%. Given Ready Capital’s stronger consensus rating and higher possible upside, analysts clearly believe Ready Capital is more favorable than Equity Lifestyle Properties.

Profitability

This table compares Equity Lifestyle Properties and Ready Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equity Lifestyle Properties 27.53% 21.94% 7.00%
Ready Capital 31.74% 8.70% 1.66%

Risk & Volatility

Equity Lifestyle Properties has a beta of 0.3, indicating that its share price is 70% less volatile than the S&P 500. Comparatively, Ready Capital has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500.

Dividends

Equity Lifestyle Properties pays an annual dividend of $1.23 per share and has a dividend yield of 2.3%. Ready Capital pays an annual dividend of $1.60 per share and has a dividend yield of 20.3%. Equity Lifestyle Properties pays out 58.9% of its earnings in the form of a dividend. Ready Capital pays out 103.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Equity Lifestyle Properties has raised its dividend for 8 consecutive years and Ready Capital has raised its dividend for 2 consecutive years.

Summary

Equity Lifestyle Properties beats Ready Capital on 11 of the 17 factors compared between the two stocks.

Equity Lifestyle Properties Company Profile

We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of January 28, 2019, we own or have an interest in 409 quality properties in 33 states and British Columbia consisting of 153,984 sites.

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.

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