Ready Capital (NYSE:RC – Get Free Report) and Paramount Group (NYSE:PGRE – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, dividends, earnings, risk and profitability.
Dividends
Ready Capital pays an annual dividend of $1.20 per share and has a dividend yield of 15.5%. Paramount Group pays an annual dividend of $0.14 per share and has a dividend yield of 2.8%. Ready Capital pays out 74.5% of its earnings in the form of a dividend. Paramount Group pays out -12.1% 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.
Insider & Institutional Ownership
55.9% of Ready Capital shares are owned by institutional investors. Comparatively, 65.6% of Paramount Group shares are owned by institutional investors. 1.1% of Ready Capital shares are owned by company insiders. Comparatively, 13.5% of Paramount Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ready Capital | 1 | 6 | 1 | 0 | 2.00 |
| Paramount Group | 2 | 2 | 1 | 0 | 1.80 |
Ready Capital currently has a consensus target price of $9.38, suggesting a potential upside of 20.97%. Paramount Group has a consensus target price of $4.70, suggesting a potential downside of 7.66%. Given Ready Capital’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Ready Capital is more favorable than Paramount Group.
Volatility and Risk
Ready Capital has a beta of 1.42, indicating that its share price is 42% more volatile than the S&P 500. Comparatively, Paramount Group has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500.
Valuation & Earnings
This table compares Ready Capital and Paramount Group”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ready Capital | $121.36 million | 10.73 | $339.45 million | $1.61 | 4.81 |
| Paramount Group | $757.94 million | 1.46 | -$259.74 million | ($1.16) | -4.39 |
Ready Capital has higher earnings, but lower revenue than Paramount Group. Paramount Group is trading at a lower price-to-earnings ratio than Ready Capital, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Ready Capital and Paramount Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ready Capital | -5.67% | 7.32% | 1.46% |
| Paramount Group | -27.96% | -5.15% | -2.64% |
Summary
Ready Capital beats Paramount Group on 11 of the 15 factors compared between 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 Paramount Group
Paramount Group, Inc. ("Paramount" or the "Company") is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.
Receive News & Ratings for Ready Capital Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Ready Capital and related companies with MarketBeat.com's FREE daily email newsletter.
