Reviewing CTO Realty Growth (NYSE:CTO) & Ready Capital (NYSE:RC)

CTO Realty Growth (NYSE:CTO) and Ready Capital (NYSE:RC) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, risk, earnings, valuation and institutional ownership.

Risk & Volatility

CTO Realty Growth has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, Ready Capital has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500.

Insider & Institutional Ownership

67.2% of CTO Realty Growth shares are owned by institutional investors. Comparatively, 55.9% of Ready Capital shares are owned by institutional investors. 5.3% of CTO Realty Growth shares are owned by insiders. Comparatively, 1.1% of Ready Capital shares are owned 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.

Dividends

CTO Realty Growth pays an annual dividend of $1.52 per share and has a dividend yield of 7.9%. Ready Capital pays an annual dividend of $1.00 per share and has a dividend yield of 18.7%. CTO Realty Growth pays out -690.9% of its earnings in the form of a dividend. Ready Capital pays out -142.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Valuation & Earnings

This table compares CTO Realty Growth and Ready Capital”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CTO Realty Growth	$124.52 million	4.93	$5.53 million	($0.22)	-87.67
Ready Capital	$81.15 million	11.10	$339.45 million	($0.70)	-7.64

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for CTO Realty Growth and Ready Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CTO Realty Growth	0	0	2	2	3.50
Ready Capital	1	7	1	0	2.00

CTO Realty Growth presently has a consensus target price of $21.50, suggesting a potential upside of 11.47%. Ready Capital has a consensus target price of $7.86, suggesting a potential upside of 46.94%. Given Ready Capital’s higher probable upside, analysts clearly believe Ready Capital is more favorable than CTO Realty Growth.

Profitability

This table compares CTO Realty Growth and Ready Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CTO Realty Growth	-1.58%	-0.38%	-0.18%
Ready Capital	-11.65%	7.53%	1.49%

Summary

CTO Realty Growth beats Ready Capital on 9 of the 17 factors compared between the two stocks.

About CTO Realty Growth

CTO Realty Growth, Inc. is a publicly traded real estate investment trust that owns and operates a portfolio of high-quality, retail-based properties located primarily in higher growth markets in the United States. CTO also externally manages and owns a meaningful interest in Alpine Income Property Trust, Inc. (NYSE: PINE), a publicly traded net lease REIT.

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.