Head to Head Comparison: Easterly Government Properties (NYSE:DEA) vs. RAIT Financial Trust (RAS)
Easterly Government Properties (NYSE: DEA) and RAIT Financial Trust (NYSE:RAS) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.
Earnings and Valuation
This table compares Easterly Government Properties and RAIT Financial Trust’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Easterly Government Properties||$116.22 million||6.29||$60.40 million||$0.10||197.72|
|RAIT Financial Trust||$58.95 million||1.95||-$142.75 million||($1.54)||-0.81|
Easterly Government Properties has higher revenue and earnings than RAIT Financial Trust. RAIT Financial Trust is trading at a lower price-to-earnings ratio than Easterly Government Properties, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and recommmendations for Easterly Government Properties and RAIT Financial Trust, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Easterly Government Properties||0||1||2||0||2.67|
|RAIT Financial Trust||1||1||1||0||2.00|
Easterly Government Properties currently has a consensus target price of $21.83, suggesting a potential upside of 10.44%. RAIT Financial Trust has a consensus target price of $3.25, suggesting a potential upside of 162.10%. Given RAIT Financial Trust’s higher probable upside, analysts plainly believe RAIT Financial Trust is more favorable than Easterly Government Properties.
Easterly Government Properties pays an annual dividend of $1.00 per share and has a dividend yield of 5.1%. RAIT Financial Trust pays an annual dividend of $0.36 per share and has a dividend yield of 29.0%. Easterly Government Properties pays out 1,000.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RAIT Financial Trust pays out -23.4% of its earnings in the form of a dividend. RAIT Financial Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Easterly Government Properties has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, RAIT Financial Trust has a beta of 1.58, meaning that its stock price is 58% more volatile than the S&P 500.
Institutional & Insider Ownership
91.9% of Easterly Government Properties shares are owned by institutional investors. Comparatively, 60.3% of RAIT Financial Trust shares are owned by institutional investors. 18.1% of Easterly Government Properties shares are owned by insiders. Comparatively, 1.3% of RAIT Financial Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares Easterly Government Properties and RAIT Financial Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Easterly Government Properties||3.40%||0.58%||0.36%|
|RAIT Financial Trust||-99.46%||0.98%||0.15%|
Easterly Government Properties beats RAIT Financial Trust on 10 of the 15 factors compared between the two stocks.
About Easterly Government Properties
Easterly Government Properties, Inc. is an internally managed real estate investment trust (REIT). The Company focuses on the acquisition, development and management of Class A commercial properties that are leased to the United States Government agencies. The Company leases its properties to such agencies through the United States General Services Administration (GSA). The operations of the Company are carried on primarily through Easterly Government Properties, LP and the subsidiaries of the Operating Partnership. As of December 31, 2016, it had 43 operating properties in the United States, including 40 operating properties that are leased primarily to the United States Government tenant agencies and three operating properties that are entirely leased to private tenants, encompassing approximately 3.1 million square feet in the aggregate. In addition, the Company had one property under development encompassing approximately 0.1 million square feet as of December 31, 2016.
About RAIT Financial Trust
RAIT Financial Trust (RAIT) is a real estate investment trust (REIT). The Company focuses on providing commercial real estate (CRE) financing throughout the United States. The core of its business is a full service CRE lending platform focused on first lien loans. It offers customized lending solutions to meet borrower needs and internal credit goals. It offers personalized middle-market financing solutions and a complement of lending products for CRE. The Company may also offer mezzanine loans and preferred equity interests in limited circumstances to support first lien loans. It is engaged in floating rate securitization programs and has access to multiple sources of funding, including senior debt, convertible securities, preferred securities and common securities. The Company also owns and manages a portfolio of CRE properties, and manages real estate assets for third parties. The Company is engaged in lending, owning and managing CRE assets throughout the United States.
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