Ready Capital (NYSE:RC) & Seven Hills Realty Trust (NASDAQ:SEVN) Head to Head Comparison

Seven Hills Realty Trust (NASDAQ:SEVN) and Ready Capital (NYSE:RC) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, profitability and earnings.

Earnings and Valuation

This table compares Seven Hills Realty Trust and Ready Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Seven Hills Realty Trust	$25.58 million	N/A	N/A	$1.46	4.95
Ready Capital	-$39.88 million	-5.20	-$228.91 million	($3.47)	-0.36

Seven Hills Realty Trust has higher revenue and earnings than Ready Capital. Ready Capital is trading at a lower price-to-earnings ratio than Seven Hills Realty Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

Seven Hills Realty Trust pays an annual dividend of $1.12 per share and has a dividend yield of 15.5%. Ready Capital pays an annual dividend of $0.04 per share and has a dividend yield of 3.2%. Seven Hills Realty Trust pays out 76.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ready Capital pays out -1.2% of its earnings in the form of a dividend.

Profitability

This table compares Seven Hills Realty Trust and Ready Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Seven Hills Realty Trust	N/A	N/A	N/A
Ready Capital	-131.76%	-16.78%	-3.43%

Institutional & Insider Ownership

55.9% of Ready Capital shares are owned by institutional investors. 1.4% of Ready Capital shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Seven Hills Realty Trust and Ready Capital, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Seven Hills Realty Trust	1	0	5	0	2.67
Ready Capital	2	3	0	0	1.60

Seven Hills Realty Trust currently has a consensus target price of $10.12, indicating a potential upside of 40.24%. Ready Capital has a consensus target price of $2.17, indicating a potential upside of 72.64%. Given Ready Capital’s higher possible upside, analysts plainly believe Ready Capital is more favorable than Seven Hills Realty Trust.

Summary

Seven Hills Realty Trust beats Ready Capital on 9 of the 13 factors compared between the two stocks.

About Seven Hills Realty Trust

Seven Hills Realty Trust, a real estate investment trust, focuses on originating and investing in first mortgage loans secured by middle market and transitional commercial real estate in the United States. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was formerly known as RMR Mortgage Trust. Seven Hills Realty Trust was incorporated in 2008 and is headquartered in Newton, Massachusetts.

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.