Braemar Hotels & Resorts (NYSE:BHR – Get Free Report) and Ready Capital (NYSE:RC – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.
Dividends
Braemar Hotels & Resorts pays an annual dividend of $0.20 per share and has a dividend yield of 6.2%. Ready Capital pays an annual dividend of $1.20 per share and has a dividend yield of 15.1%. Braemar Hotels & Resorts pays out -17.9% of its earnings in the form of a dividend. Ready Capital pays out 74.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Institutional & Insider Ownership
64.8% of Braemar Hotels & Resorts shares are held by institutional investors. Comparatively, 55.9% of Ready Capital shares are held by institutional investors. 1.7% of Braemar Hotels & Resorts shares are held by company insiders. Comparatively, 1.1% of Ready Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Braemar Hotels & Resorts | -4.95% | -12.33% | -1.64% |
| Ready Capital | -5.67% | 7.32% | 1.46% |
Analyst Ratings
This is a summary of current recommendations and price targets for Braemar Hotels & Resorts and Ready Capital, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Braemar Hotels & Resorts | 0 | 1 | 0 | 0 | 2.00 |
| Ready Capital | 1 | 6 | 1 | 0 | 2.00 |
Braemar Hotels & Resorts presently has a consensus target price of $2.50, suggesting a potential downside of 23.08%. Ready Capital has a consensus target price of $9.38, suggesting a potential upside of 17.92%. Given Ready Capital’s higher possible upside, analysts clearly believe Ready Capital is more favorable than Braemar Hotels & Resorts.
Volatility & Risk
Braemar Hotels & Resorts has a beta of 2, indicating that its share price is 100% more volatile than the S&P 500. Comparatively, Ready Capital has a beta of 1.42, indicating that its share price is 42% more volatile than the S&P 500.
Valuation & Earnings
This table compares Braemar Hotels & Resorts and Ready Capital”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Braemar Hotels & Resorts | $744.00 million | 0.29 | -$27.02 million | ($1.12) | -2.90 |
| Ready Capital | $945.81 million | 1.41 | $339.45 million | $1.61 | 4.94 |
Ready Capital has higher revenue and earnings than Braemar Hotels & Resorts. Braemar Hotels & Resorts is trading at a lower price-to-earnings ratio than Ready Capital, indicating that it is currently the more affordable of the two stocks.
Summary
Ready Capital beats Braemar Hotels & Resorts on 10 of the 15 factors compared between the two stocks.
About Braemar Hotels & Resorts
Braemar Hotels & Resorts is a conservatively capitalized REIT that invests primarily in high RevPAR, full-service luxury hotels and resorts. We are listed on the New York Stock Exchange under the symbol BHR and are externally-advised by Ashford (NYSE American: AINC).
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.
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