Contrasting Resource Capital (RSO) and Winthrop Realty Trust (FUR)

Resource Capital (NYSE: RSO) and Winthrop Realty Trust (NYSE:FUR) are both small-cap financials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Resource Capital and Winthrop Realty Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Resource Capital 0 3 0 0 2.00
Winthrop Realty Trust 0 0 0 0 N/A

Resource Capital presently has a consensus price target of $11.50, suggesting a potential upside of 21.95%. Given Resource Capital’s higher probable upside, equities analysts clearly believe Resource Capital is more favorable than Winthrop Realty Trust.

Valuation and Earnings

This table compares Resource Capital and Winthrop Realty Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Resource Capital $62.68 million 4.72 -$30.36 million $1.24 7.60
Winthrop Realty Trust N/A N/A N/A $0.15 62.20

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

Profitability

This table compares Resource Capital and Winthrop Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Resource Capital 63.00% -1.23% -0.44%
Winthrop Realty Trust N/A N/A N/A

Risk and Volatility

Resource Capital has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, Winthrop Realty Trust has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500.

Institutional and Insider Ownership

50.2% of Resource Capital shares are held by institutional investors. 4.8% of Resource Capital shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Resource Capital pays an annual dividend of $0.20 per share and has a dividend yield of 2.1%. Winthrop Realty Trust does not pay a dividend. Resource Capital pays out 16.1% of its earnings in the form of a dividend. Winthrop Realty Trust has raised its dividend for 3 consecutive years.

Summary

Resource Capital beats Winthrop Realty Trust on 8 of the 13 factors compared between the two stocks.

Resource Capital Company Profile

Resource Capital Corp. is a real estate finance company. The Company operates through four segments: Commercial Real Estate Debt Investments, Commercial Finance, Residential Mortgage Lending and Corporate & Other. The Commercial Real Estate Debt Investments segment includes the Company’s activities and operations related to commercial real estate loans, commercial real estate-related securities and investments in real estate. The Commercial Finance segment includes the Company’s activities and operations related to syndicated corporate loans, syndicated corporate loan-related securities and direct financing leases. The Residential Mortgage Lending segment includes the Company’s activities and operations related to the investment in residential mortgage-backed securities (RMBS).

Winthrop Realty Trust Company Profile

Winthrop Realty Trust (Winthrop) is a real estate investment trust (REIT). The Company conducts its business through its operating partnership, WRT Realty L.P. (Operating Partnership). The Company’s business is owning real property and real estate related assets. The Company has adopted a plan of liquidation. The Company is not permitted to make any new investments other than protective acquisitions or advances with respect to its existing assets, including providing seller financing to purchasers of its assets if it deems it prudent to facilitate the sale of such asset. It is permitted to satisfy any existing contractual obligations, including any capital call requirements and acquisitions or dispositions pursuant to buy-sell provisions under existing joint venture documentation. The Company holds approximately 10 consolidated operating properties, over 10 equity investments, approximately four loans receivable, one secured financing receivable and one loan security.

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