Reviewing Ready Capital (NYSE:RC) and AG Mortgage Investment Trust (NYSE:MITT)

Ready Capital (NYSE:RCGet Free Report) and AG Mortgage Investment Trust (NYSE:MITTGet Free Report) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, valuation, dividends, risk and earnings.

Dividends

Ready Capital pays an annual dividend of $0.04 per share and has a dividend yield of 2.3%. AG Mortgage Investment Trust pays an annual dividend of $0.96 per share and has a dividend yield of 11.9%. Ready Capital pays out -1.3% of its earnings in the form of a dividend. AG Mortgage Investment Trust pays out 240.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AG Mortgage Investment Trust has raised its dividend for 2 consecutive years. AG Mortgage Investment Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Ready Capital and AG Mortgage Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ready Capital -102.10% -14.69% -2.98%
AG Mortgage Investment Trust 6.71% 15.02% 0.59%

Institutional and Insider Ownership

55.9% of Ready Capital shares are held by institutional investors. Comparatively, 27.3% of AG Mortgage Investment Trust shares are held by institutional investors. 1.4% of Ready Capital shares are held by insiders. Comparatively, 3.3% of AG Mortgage Investment Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Ready Capital and AG Mortgage Investment Trust”s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ready Capital $569.17 million 0.52 -$228.91 million ($3.18) -0.56
AG Mortgage Investment Trust $480.33 million 0.54 $48.67 million $0.40 20.24

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Ready Capital and AG Mortgage Investment Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ready Capital 2 4 0 0 1.67
AG Mortgage Investment Trust 0 3 6 0 2.67

Ready Capital currently has a consensus price target of $2.81, indicating a potential upside of 58.45%. AG Mortgage Investment Trust has a consensus price target of $9.14, indicating a potential upside of 12.96%. Given Ready Capital’s higher probable upside, research analysts clearly believe Ready Capital is more favorable than AG Mortgage Investment Trust.

Risk & Volatility

Ready Capital has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500. Comparatively, AG Mortgage Investment Trust has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500.

Summary

AG Mortgage Investment Trust beats Ready Capital on 13 of the 17 factors compared between the two stocks.

About Ready Capital

(Get Free Report)

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 AG Mortgage Investment Trust

(Get Free Report)

AG Mortgage Investment Trust, Inc. operates as a residential mortgage real estate investment trust in the United States. Its investment portfolio includes residential investments, including non-agency loans, agency-eligible loans, re-and non-performing loans, and non-agency residential mortgage-backed securities, as well as commercial loans and commercial mortgage-backed securities. 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. AG Mortgage Investment Trust, Inc. was incorporated in 2011 and is based in New York, New York.

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