Critical Review: Sunrise Realty Trust (NASDAQ:SUNS) versus Smith Douglas Homes (NYSE:SDHC)

Smith Douglas Homes (NYSE:SDHC) and Sunrise Realty Trust (NASDAQ:SUNS) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Volatility & Risk

Smith Douglas Homes has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, Sunrise Realty Trust has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.

Profitability

This table compares Smith Douglas Homes and Sunrise Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smith Douglas Homes	1.13%	0.12%	0.10%
Sunrise Realty Trust	62.48%	7.76%	4.85%

Earnings & Valuation

This table compares Smith Douglas Homes and Sunrise Realty Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smith Douglas Homes	$975.46 million	1.09	$16.07 million	$1.25	16.57
Sunrise Realty Trust	$22.82 million	5.43	$6.87 million	$1.09	8.48

Smith Douglas Homes has higher revenue and earnings than Sunrise Realty Trust. Sunrise Realty Trust is trading at a lower price-to-earnings ratio than Smith Douglas Homes, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and price targets for Smith Douglas Homes and Sunrise Realty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smith Douglas Homes	3	5	1	0	1.78
Sunrise Realty Trust	1	1	2	1	2.60

Smith Douglas Homes presently has a consensus target price of $16.60, suggesting a potential downside of 19.86%. Sunrise Realty Trust has a consensus target price of $12.75, suggesting a potential upside of 37.99%. Given Sunrise Realty Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Sunrise Realty Trust is more favorable than Smith Douglas Homes.

Summary

Sunrise Realty Trust beats Smith Douglas Homes on 8 of the 13 factors compared between the two stocks.

About Smith Douglas Homes

Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp. was founded in 2008 and is headquartered in Woodstock, Georgia.

About Sunrise Realty Trust

Sunrise Realty Trust, Inc. engages in commercial real estate (CRE) lending business. It focuses on originating CRE debt investments and providing capital to borrowers and sponsors with transitional business plans collateralized by CRE assets. The company intends to create a diversified investment portfolio, targeting investments in senior mortgage loans, mezzanine loans, whole loans, B-notes, CMBS, and debt-like preferred equity securities across CRE asset classes. Sunrise Realty Trust, Inc. was incorporated in 2023 and is based in West Palm Beach, Florida.