Ready Capital (NYSE:RC) & Manhattan Bridge Capital (NASDAQ:LOAN) Head-To-Head Analysis

Ready Capital (NYSE:RC) and Manhattan Bridge Capital (NASDAQ:LOAN) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Volatility and Risk

Ready Capital has a beta of 1.45, meaning that its stock price is 45% more volatile than the S&P 500. Comparatively, Manhattan Bridge Capital has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500.

Institutional and Insider Ownership

55.9% of Ready Capital shares are held by institutional investors. Comparatively, 21.8% of Manhattan Bridge Capital shares are held by institutional investors. 1.1% of Ready Capital shares are held by company insiders. Comparatively, 24.5% of Manhattan Bridge Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Ready Capital and Manhattan Bridge Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ready Capital	1	6	1	0	2.00
Manhattan Bridge Capital	0	0	0	0	0.00

Ready Capital currently has a consensus target price of $6.96, indicating a potential upside of 65.48%. Given Ready Capital’s stronger consensus rating and higher possible upside, equities analysts clearly believe Ready Capital is more favorable than Manhattan Bridge Capital.

Profitability

This table compares Ready Capital and Manhattan Bridge Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ready Capital	-11.65%	7.53%	1.49%
Manhattan Bridge Capital	56.93%	13.06%	7.75%

Earnings & Valuation

This table compares Ready Capital and Manhattan Bridge Capital”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ready Capital	$20.60 million	34.81	$339.45 million	($1.74)	-2.42
Manhattan Bridge Capital	$7.31 million	8.06	$5.48 million	$0.47	10.96

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

Dividends

Ready Capital pays an annual dividend of $0.50 per share and has a dividend yield of 11.9%. Manhattan Bridge Capital pays an annual dividend of $0.46 per share and has a dividend yield of 8.9%. Ready Capital pays out -28.7% of its earnings in the form of a dividend. Manhattan Bridge Capital pays out 97.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Manhattan Bridge Capital has raised its dividend for 1 consecutive years. Ready Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Ready Capital beats Manhattan Bridge Capital on 10 of the 17 factors compared between the two stocks.

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.

About Manhattan Bridge Capital

Manhattan Bridge Capital, Inc., a real estate finance company, originates, services, and manages a portfolio of first mortgage loans in the United States. The company offers short-term, secured, and non-banking loans to real estate investors to fund acquisition, renovation, rehabilitation, or development of residential or commercial properties. Its loans are secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers. 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 founded in 1989 and is headquartered in Great Neck, New York.