Head-To-Head Review: Ready Capital (NYSE:RC) vs. Douglas Emmett (NYSE:DEI)

Ready Capital (NYSE:RC) and Douglas Emmett (NYSE:DEI) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Institutional & Insider Ownership

55.9% of Ready Capital shares are held by institutional investors. Comparatively, 97.4% of Douglas Emmett shares are held by institutional investors. 1.1% of Ready Capital shares are held by company insiders. Comparatively, 14.7% of Douglas Emmett shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Ready Capital pays an annual dividend of $0.50 per share and has a dividend yield of 10.4%. Douglas Emmett pays an annual dividend of $0.76 per share and has a dividend yield of 5.4%. Ready Capital pays out -18.9% of its earnings in the form of a dividend. Douglas Emmett pays out 584.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ready Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Ready Capital and Douglas Emmett’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ready Capital	-11.65%	7.53%	1.49%
Douglas Emmett	2.38%	0.63%	0.25%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Ready Capital and Douglas Emmett, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ready Capital	1	7	1	0	2.00
Douglas Emmett	0	5	4	0	2.44

Ready Capital presently has a consensus price target of $7.50, suggesting a potential upside of 55.60%. Douglas Emmett has a consensus price target of $18.50, suggesting a potential upside of 30.47%. Given Ready Capital’s higher possible upside, equities analysts plainly believe Ready Capital is more favorable than Douglas Emmett.

Risk and Volatility

Ready Capital has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Douglas Emmett has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500.

Valuation & Earnings

This table compares Ready Capital and Douglas Emmett”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ready Capital	$27.35 million	30.28	$339.45 million	($2.64)	-1.83
Douglas Emmett	$986.48 million	2.41	$23.52 million	$0.13	109.08

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

About Ready Capital

Ready Capital Corporation operates as 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 lower-to-middle-market (LLM) commercial real estate loans, small business administration (SBA) loans, residential mortgage loans, construction loans, and mortgage-backed securities collateralized primarily by LLM loans, or other real estate-related investments. The LMM Commercial Real Estate segment originates LLM loans across the full life-cycle 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 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.

About Douglas Emmett

Douglas Emmett, Inc. (DEI) is a fully integrated, self-administered and self-managed real estate investment trust (REIT), and one of the largest owners and operators of high-quality office and multifamily properties located in the premier coastal submarkets of Los Angeles and Honolulu. Douglas Emmett focuses on owning and acquiring a substantial share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities.