Critical Comparison Between Ready Capital (NYSE:RC) and SBA Communications (NASDAQ:SBAC)

Ready Capital (NYSE:RC – Get Free Report) and SBA Communications (NASDAQ:SBAC – Get Free Report) are both financial companies, but which one is the better investment? We’ll compare the two companies based on their risk strength, earnings, analyst recommendations, dividends, valuation, profitability, and institutional ownership.

Profitability

This table compares net margins, return on equity and return on assets for Ready Capital and SBA Communications.

Dividends

Ready Capital pays an annual dividend of $1.20 per share and has a dividend yield of 13.0%. SBA Communications pays an annual dividend of $3.92 per share and has a dividend yield of 1.9%. Ready Capital pays out 74.5% of its earnings as dividends. SBA Communications pays out 76.9% of its earnings as dividends, suggesting that it may not have enough earnings to cover its dividend payments in the future. Ready Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and volatility

Ready Capital has a beta of 1.43, which suggests that its stock price is 43% more volatile than the S&P 500. In comparison, SBA Communications has a beta of 0.65, which suggests that its stock price is 35% less volatile than the S&P 500.

Analysts’ recommendations

This is a breakdown of current recommendations for Ready Capital and SBA Communications, as reported by MarketBeat.

Ready Capital’s consensus price target is currently $10.93, indicating an upside potential of 18.40%. SBA Communications’ consensus price target is $248.31, indicating an upside potential of 18.91%. Given SBA Communications’ higher consensus rating and higher likely upside potential, analysts clearly believe that SBA Communications is more favorable than Ready Capital.

Evaluation and benefits

This table compares the revenue, earnings per share (EPS) and valuation of Ready Capital and SBA Communications.

SBA Communications has higher revenue and earnings than Ready Capital. Ready Capital is trading at a lower price-to-earnings ratio than SBA Communications, indicating that it is currently the cheaper stock of the two.

Institutional and internal property

55.9% of Ready Capital’s stock is owned by institutional investors. In comparison, 97.3% of SBA Communications’ stock is owned by institutional investors. 1.1% of Ready Capital’s stock is owned by company insiders. In comparison, 1.3% of SBA Communications’ stock is owned by company insiders. High institutional ownership is an indication that large money managers, endowments, and hedge funds believe a stock is poised for long-term growth.

Summary

SBA Communications beats Ready Capital on 12 of 17 factors compared between the two stocks.

About Ready Capital

(Get a free report)

Ready Capital Corporation is 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 middle market (LLM) commercial real estate loans, Small Business Administration (SBA) loans, residential mortgages, construction loans and mortgage-backed securities secured primarily by LLM loans or other real estate-related investments. The LMM Commercial Real Estate segment originates LLM loans throughout the lifecycle 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 tax if it distributes at least 90% of its taxable income to its shareholders. The company was previously 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 SBA Communications

(Get a free report)

SBA Communications Corporation is a leading independent owner and operator of wireless communications infrastructure, including towers, buildings, rooftops, distributed antenna systems (DAS) and small cells. With a portfolio of more than 39,000 communications sites across the Americas, Africa and Asia, SBA is listed on NASDAQ under the symbol SBAC. Our organization is a component of the S&P 500 and is one of the largest real estate investment trusts (REITs) by market capitalization.

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