Critical Survey: Sunrise Realty Trust (NASDAQ:SUNS) versus Chicago Atlantic Real Estate Finance (NASDAQ:REFI)

Chicago Atlantic Real Estate Finance (NASDAQ:REFI) and Sunrise Realty Trust (NASDAQ:SUNS) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, analyst recommendations and earnings.

Profitability

This table compares Chicago Atlantic Real Estate Finance and Sunrise Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chicago Atlantic Real Estate Finance	55.54%	11.98%	8.46%
Sunrise Realty Trust	53.33%	8.24%	5.03%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Chicago Atlantic Real Estate Finance and Sunrise Realty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chicago Atlantic Real Estate Finance	0	3	2	0	2.40
Sunrise Realty Trust	1	2	0	0	1.67

Chicago Atlantic Real Estate Finance presently has a consensus price target of $15.33, indicating a potential upside of 46.73%. Sunrise Realty Trust has a consensus price target of $8.00, indicating a potential upside of 6.52%. Given Chicago Atlantic Real Estate Finance’s stronger consensus rating and higher possible upside, research analysts plainly believe Chicago Atlantic Real Estate Finance is more favorable than Sunrise Realty Trust.

Volatility & Risk

Chicago Atlantic Real Estate Finance has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500. Comparatively, Sunrise Realty Trust has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500.

Earnings & Valuation

This table compares Chicago Atlantic Real Estate Finance and Sunrise Realty Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chicago Atlantic Real Estate Finance	$53.45 million	4.15	$36.01 million	$1.37	7.63
Sunrise Realty Trust	$33.50 million	3.03	$12.14 million	$0.97	7.74

Chicago Atlantic Real Estate Finance has higher revenue and earnings than Sunrise Realty Trust. Chicago Atlantic Real Estate Finance is trading at a lower price-to-earnings ratio than Sunrise Realty Trust, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

25.5% of Chicago Atlantic Real Estate Finance shares are held by institutional investors. 6.5% of Chicago Atlantic Real Estate Finance shares are held by insiders. Comparatively, 28.5% of Sunrise Realty Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Chicago Atlantic Real Estate Finance pays an annual dividend of $1.88 per share and has a dividend yield of 18.0%. Sunrise Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 16.0%. Chicago Atlantic Real Estate Finance pays out 137.2% 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 123.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chicago Atlantic Real Estate Finance has increased its dividend for 1 consecutive years. Chicago Atlantic Real Estate Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Chicago Atlantic Real Estate Finance beats Sunrise Realty Trust on 13 of the 17 factors compared between the two stocks.

About Chicago Atlantic Real Estate Finance

Chicago Atlantic Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. The company engages in originating, structuring, and investing in first mortgage loans and alternative structured financings secured by commercial real estate properties. Its portfolio primarily includes offers senior loans to state-licensed operators in the cannabis industry. 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. Chicago Atlantic Real Estate Finance, Inc. was incorporated in 2021 and is headquartered in Chicago, Illinois.

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.