NorthStar Asset Management Group (NYSE: CLNS) and Sutherland Asset Management Corp. (NYSE:SLD) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings and price targets for NorthStar Asset Management Group and Sutherland Asset Management Corp., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NorthStar Asset Management Group 0 2 3 0 2.60
Sutherland Asset Management Corp. 0 0 1 0 3.00

NorthStar Asset Management Group currently has a consensus target price of $16.81, suggesting a potential upside of 29.83%. Sutherland Asset Management Corp. has a consensus target price of $16.00, suggesting a potential upside of 0.16%. Given NorthStar Asset Management Group’s higher possible upside, equities analysts clearly believe NorthStar Asset Management Group is more favorable than Sutherland Asset Management Corp..

Profitability

This table compares NorthStar Asset Management Group and Sutherland Asset Management Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NorthStar Asset Management Group 7.95% 3.04% 1.37%
Sutherland Asset Management Corp. 42.38% 8.19% 1.83%

Volatility and Risk

NorthStar Asset Management Group has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500. Comparatively, Sutherland Asset Management Corp. has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500.

Earnings and Valuation

This table compares NorthStar Asset Management Group and Sutherland Asset Management Corp.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NorthStar Asset Management Group $1.78 billion 4.02 $945.30 million $0.13 99.62
Sutherland Asset Management Corp. $124.55 million 4.10 $61.43 million $1.92 8.32

NorthStar Asset Management Group has higher revenue and earnings than Sutherland Asset Management Corp.. Sutherland Asset Management Corp. is trading at a lower price-to-earnings ratio than NorthStar Asset Management Group, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

82.3% of NorthStar Asset Management Group shares are owned by institutional investors. Comparatively, 30.2% of Sutherland Asset Management Corp. shares are owned by institutional investors. 8.0% of NorthStar Asset Management Group shares are owned by company insiders. Comparatively, 2.4% of Sutherland Asset Management Corp. 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.

Dividends

NorthStar Asset Management Group pays an annual dividend of $1.08 per share and has a dividend yield of 8.3%. Sutherland Asset Management Corp. pays an annual dividend of $1.48 per share and has a dividend yield of 9.3%. NorthStar Asset Management Group pays out 830.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sutherland Asset Management Corp. pays out 77.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sutherland Asset Management Corp. is clearly the better dividend stock, given its higher yield and lower payout ratio.

About NorthStar Asset Management Group

Colony NorthStar, Inc. is a diversified equity real estate investment trust (REIT). The Company combines a portfolio of real assets across the world, which are managed with a global real estate investment manager. The Company has property holdings in the healthcare, industrial and hospitality sectors, opportunistic equity and debt investments, and an embedded institutional and retail investment management business. In addition, the Company owns NorthStar Securities, LLC, a captive broker-dealer platform which raises capital in the retail market. The Company acquires, develops and operates industrial properties in metropolitan markets throughout the United States with a focus on light industrial buildings. The Company provides investment management services and offers investment products while serving as a fiduciary to a set of institutional and individual investors.

About Sutherland Asset Management Corp.

Sutherland Asset Management Corporation, formerly ZAIS Financial Corp., is a diversified mortgage real estate investment trust (REIT). The Company originates, acquires, finances, services and manages small balance commercial loans (SBC) and Small Business Administration (SBA) loans. The Company focuses on maintaining its existing residential mortgage origination platform, GMFS. The Company originates SBC and SBA loans through its ReadyCap subsidiaries. The Company also invests in asset-backed securities, where the underlying pool of assets consists primarily of SBC loans, and other real estate-related investments. The Company is managed and advised by Waterfall Asset Management, LLC.

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