Power REIT (NYSE:PW – Get Free Report) and Ready Capital (NYSE:RC – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.
Insider and Institutional Ownership
14.7% of Power REIT shares are owned by institutional investors. Comparatively, 55.9% of Ready Capital shares are owned by institutional investors. 20.9% of Power REIT shares are owned by company insiders. Comparatively, 1.1% of Ready Capital 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.
Profitability
This table compares Power REIT and Ready Capital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Power REIT | -1,516.94% | -206.18% | -50.55% |
| Ready Capital | -5.67% | 7.32% | 1.46% |
Volatility and Risk
Valuation & Earnings
This table compares Power REIT 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 | |
| Power REIT | $2.36 million | 1.74 | -$14.37 million | ($4.94) | -0.24 |
| Ready Capital | $121.36 million | 11.09 | $339.45 million | $1.61 | 4.98 |
Ready Capital has higher revenue and earnings than Power REIT. Power REIT 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 Recommendations
This is a summary of current ratings and target prices for Power REIT and Ready Capital, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Power REIT | 0 | 0 | 0 | 0 | N/A |
| Ready Capital | 1 | 5 | 1 | 0 | 2.00 |
Ready Capital has a consensus target price of $9.65, suggesting a potential upside of 20.47%. Given Ready Capital’s higher probable upside, analysts plainly believe Ready Capital is more favorable than Power REIT.
Summary
Ready Capital beats Power REIT on 12 of the 13 factors compared between the two stocks.
About Power REIT
Power REIT, with a focus on the Triple Bottom Line and a commitment to Profit, Planet and People is a specialized real estate investment trust (REIT) that owns sustainable real estate related to infrastructure assets including properties for Controlled Environment Agriculture, Renewable Energy and Transportation. Power REIT is actively seeking to expand its real estate portfolio related to Controlled Environment Agriculture in the form of greenhouses for the cultivation of food and cannabis.
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.
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