American Tower (NYSE:AMT – Get Free Report) and Rithm Capital (NYSE:RITM – Get Free Report) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, risk, institutional ownership, valuation, dividends and profitability.
Dividends
American Tower pays an annual dividend of $6.80 per share and has a dividend yield of 3.3%. Rithm Capital pays an annual dividend of $1.00 per share and has a dividend yield of 8.8%. American Tower pays out 141.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rithm Capital pays out 59.9% of its earnings in the form of a dividend. Rithm Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk & Volatility
American Tower has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Rithm Capital has a beta of 1.83, suggesting that its stock price is 83% more volatile than the S&P 500.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Tower | 0 | 3 | 10 | 3 | 3.00 |
| Rithm Capital | 0 | 1 | 4 | 1 | 3.00 |
American Tower currently has a consensus target price of $226.29, indicating a potential upside of 9.49%. Rithm Capital has a consensus target price of $13.25, indicating a potential upside of 15.97%. Given Rithm Capital’s higher probable upside, analysts clearly believe Rithm Capital is more favorable than American Tower.
Valuation and Earnings
This table compares American Tower and Rithm Capital”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Tower | $10.13 billion | 9.54 | $1.48 billion | $4.81 | 42.97 |
| Rithm Capital | $3.02 billion | 1.97 | $931.50 million | $1.67 | 6.84 |
American Tower has higher revenue and earnings than Rithm Capital. Rithm Capital is trading at a lower price-to-earnings ratio than American Tower, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
92.7% of American Tower shares are owned by institutional investors. Comparatively, 44.9% of Rithm Capital shares are owned by institutional investors. 0.2% of American Tower shares are owned by company insiders. Comparatively, 0.4% of Rithm Capital shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares American Tower and Rithm Capital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Tower | 10.05% | 22.01% | 3.55% |
| Rithm Capital | 17.79% | 18.15% | 2.57% |
Summary
American Tower beats Rithm Capital on 10 of the 16 factors compared between the two stocks.
About American Tower
American Tower, one of the largest global REITs, is a leading independent owner, operator and developer of multitenant communications real estate with a portfolio of over 224,000 communications sites and a highly interconnected footprint of U.S. data center facilities.
About Rithm Capital
Rithm Capital Corp. operates as an asset manager focused on real estate, credit, and financial services. It operates through Origination and Servicing, Investment Portfolio, Mortgage Loans Receivable, and Asset Management segments. Its investment portfolio primarily comprises of mortgage servicing rights (MSR), and MSR financing receivables, title, appraisal and property preservation, excess MSRs, and services advance investments; real estate securities, call rights, SFR properties, and residential mortgage loans; consumer and business purpose loans; and asset management related investments. 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 New Residential Investment Corp. and changed its name to Rithm Capital Corp. in August 2022. Rithm Capital Corp. was incorporated in 2011 and is based in New York, New York.
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