Analyzing Rithm Capital (NYSE:RITM) and American Tower (NYSE:AMT)

Rithm Capital (NYSE:RITM) and American Tower (NYSE:AMT) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Profitability

This table compares Rithm Capital and American Tower’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rithm Capital	17.79%	18.15%	2.57%
American Tower	10.05%	22.01%	3.55%

Earnings and Valuation

This table compares Rithm Capital and American Tower”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rithm Capital	$3.02 billion	1.98	$931.50 million	$1.67	6.90
American Tower	$10.13 billion	9.85	$1.48 billion	$4.81	44.37

American Tower has higher revenue and earnings than Rithm Capital. Rithm Capital is trading at a lower price-to-earnings ratio than American Tower, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

44.9% of Rithm Capital shares are held by institutional investors. Comparatively, 92.7% of American Tower shares are held by institutional investors. 0.4% of Rithm Capital shares are held by insiders. Comparatively, 0.2% of American Tower shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Rithm Capital and American Tower, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rithm Capital	0	1	4	1	3.00
American Tower	0	3	10	3	3.00

Rithm Capital presently has a consensus price target of $13.25, indicating a potential upside of 15.07%. American Tower has a consensus price target of $226.29, indicating a potential upside of 6.03%. Given Rithm Capital’s higher possible upside, analysts clearly believe Rithm Capital is more favorable than American Tower.

Dividends

Rithm Capital pays an annual dividend of $1.00 per share and has a dividend yield of 8.7%. American Tower pays an annual dividend of $6.80 per share and has a dividend yield of 3.2%. Rithm Capital pays out 59.9% of its earnings in the form of a dividend. American Tower pays out 141.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rithm Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Rithm Capital has a beta of 1.83, suggesting that its share price is 83% more volatile than the S&P 500. Comparatively, American Tower has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Summary

American Tower beats Rithm Capital on 10 of the 16 factors compared between the two stocks.

About Rithm Capital

Rithm Capital Corp. operates as an asset manager focused on real estate, credit, and financial services. It operates through Origination and Servicing, Investment Portfolio, Mortgage Loans Receivable, and Asset Management segments. Its investment portfolio primarily comprises of mortgage servicing rights (MSR), and MSR financing receivables, title, appraisal and property preservation, excess MSRs, and services advance investments; real estate securities, call rights, SFR properties, and residential mortgage loans; consumer and business purpose loans; and asset management related investments. The company qualifies as a real estate investment trust for federal income tax purposes. It generally 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 New Residential Investment Corp. and changed its name to Rithm Capital Corp. in August 2022. Rithm Capital Corp. was incorporated in 2011 and is based in New York, New York.

About American Tower

American Tower, one of the largest global REITs, is a leading independent owner, operator and developer of multitenant communications real estate with a portfolio of over 224,000 communications sites and a highly interconnected footprint of U.S. data center facilities.