Comparing The RMR Group (NASDAQ:RMR) and Sunrise Realty Trust (NASDAQ:SUNS)

The RMR Group (NASDAQ:RMR) and Sunrise Realty Trust (NASDAQ:SUNS) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

42.3% of The RMR Group shares are owned by institutional investors. 54.7% of The RMR Group shares are owned by company insiders. Comparatively, 28.5% of Sunrise Realty Trust shares are owned by company 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.

Profitability

This table compares The RMR Group and Sunrise Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The RMR Group	3.23%	3.44%	2.05%
Sunrise Realty Trust	56.29%	7.70%	5.35%

Dividends

The RMR Group pays an annual dividend of $1.80 per share and has a dividend yield of 8.9%. Sunrise Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 15.8%. The RMR Group pays out 148.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sunrise Realty Trust pays out 127.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The RMR Group has increased its dividend for 1 consecutive years. Sunrise Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent recommendations for The RMR Group and Sunrise Realty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The RMR Group	0	2	2	0	2.50
Sunrise Realty Trust	2	1	0	0	1.33

The RMR Group presently has a consensus price target of $19.00, suggesting a potential downside of 6.15%. Sunrise Realty Trust has a consensus price target of $8.75, suggesting a potential upside of 14.98%. Given Sunrise Realty Trust’s higher probable upside, analysts clearly believe Sunrise Realty Trust is more favorable than The RMR Group.

Risk and Volatility

The RMR Group has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, Sunrise Realty Trust has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.

Valuation and Earnings

This table compares The RMR Group and Sunrise Realty Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The RMR Group	$640.19 million	1.01	$17.60 million	$1.21	16.73
Sunrise Realty Trust	$21.57 million	4.77	$12.14 million	$0.94	8.10

The RMR Group has higher revenue and earnings than Sunrise Realty Trust. Sunrise Realty Trust is trading at a lower price-to-earnings ratio than The RMR Group, indicating that it is currently the more affordable of the two stocks.

Summary

The RMR Group beats Sunrise Realty Trust on 10 of the 17 factors compared between the two stocks.

About The RMR Group

The RMR Group Inc., through its subsidiary, The RMR Group LLC, provides asset management services in the United States. The company offers management services to its four publicly traded real estate investment trusts, three real estate operating companies, and private capital vehicles. It also provides advisory services to publicly traded mortgage real estate investment trust. The company was formerly known as REIT Management & Research Inc. and changed its name to The RMR Group Inc. in October 2015. The RMR Group Inc. was founded in 1986 and is headquartered in Newton, Massachusetts.

About Sunrise Realty Trust

Sunrise Realty Trust, Inc. engages in commercial real estate (CRE) lending business. It focuses on originating CRE debt investments and providing capital to borrowers and sponsors with transitional business plans collateralized by CRE assets. The company intends to create a diversified investment portfolio, targeting investments in senior mortgage loans, mezzanine loans, whole loans, B-notes, CMBS, and debt-like preferred equity securities across CRE asset classes. Sunrise Realty Trust, Inc. was incorporated in 2023 and is based in West Palm Beach, Florida.