MUN:0SZ

Stock Analysis Report

Executive Summary

Ready Capital Corporation operates as a real estate finance company in the United States.

Rewards

Trading at 71% below its fair value

Earnings are forecast to grow 9.76% per year

Earnings grew by 22.5% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 33.33% is not well covered by earnings or forecast to be in the next 3 years

Highly volatile share price over past 3 months

Large one-off items impacting financial results

+ 1 more risk


Snowflake Analysis

Very undervalued with proven track record.


Similar Companies

Share Price & News

How has Ready Capital's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 0SZ's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

27.8%

0SZ

26.6%

DE Mortgage REITs

9.1%

DE Market


1 Year Return

-54.3%

0SZ

-54.0%

DE Mortgage REITs

-13.1%

DE Market

Return vs Industry: 0SZ underperformed the German Mortgage REITs industry which returned -64.5% over the past year.

Return vs Market: 0SZ underperformed the German Market which returned -14.2% over the past year.


Shareholder returns

0SZIndustryMarket
7 Day27.8%26.6%9.1%
30 Day-44.5%-47.5%-1.0%
90 Day-57.0%-54.3%-20.7%
1 Year-47.8%-54.3%-48.6%-54.0%-10.6%-13.1%
3 Yearn/a-39.0%-56.2%-10.7%-18.1%
5 Yearn/a-24.6%-57.0%-10.7%-22.8%

Price Volatility Vs. Market

How volatile is Ready Capital's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Ready Capital undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 0SZ (€4.24) is trading below our estimate of fair value (€14.62)

Significantly Below Fair Value: 0SZ is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 0SZ is good value based on its PE Ratio (2.8x) compared to the Mortgage REITs industry average (3.5x).

PE vs Market: 0SZ is good value based on its PE Ratio (2.8x) compared to the German market (17.1x).


Price to Earnings Growth Ratio

PEG Ratio: 0SZ is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: 0SZ is good value based on its PB Ratio (0.3x) compared to the XX Mortgage REITs industry average (0.3x).


Next Steps

Future Growth

How is Ready Capital forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

8.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 0SZ's forecast earnings growth (9.8% per year) is above the savings rate (-0.4%).

Earnings vs Market: 0SZ's earnings (9.8% per year) are forecast to grow slower than the German market (14.1% per year).

High Growth Earnings: 0SZ's earnings are forecast to grow, but not significantly.

Revenue vs Market: 0SZ's revenue (14.3% per year) is forecast to grow faster than the German market (3.9% per year).

High Growth Revenue: 0SZ's revenue (14.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 0SZ's Return on Equity is forecast to be low in 3 years time (10.3%).


Next Steps

Past Performance

How has Ready Capital performed over the past 5 years?

12.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 0SZ has a large one-off gain of $22.9M impacting its December 31 2019 financial results.

Growing Profit Margin: 0SZ's current net profit margins (32.3%) are higher than last year (27.8%).


Past Earnings Growth Analysis

Earnings Trend: 0SZ's earnings have grown by 12.8% per year over the past 5 years.

Accelerating Growth: 0SZ's earnings growth over the past year (22.5%) exceeds its 5-year average (12.8% per year).

Earnings vs Industry: 0SZ earnings growth over the past year (22.5%) exceeded the Mortgage REITs industry 14.3%.


Return on Equity

High ROE: 0SZ's Return on Equity (8.9%) is considered low.


Next Steps

Financial Health

How is Ready Capital's financial position?


Financial Position Analysis

Short Term Liabilities: 0SZ's short term assets ($4.7B) exceed its short term liabilities ($1.1B).

Long Term Liabilities: 0SZ's short term assets ($4.7B) exceed its long term liabilities ($3.0B).


Debt to Equity History and Analysis

Debt Level: 0SZ's debt to equity ratio (476.8%) is considered high.

Reducing Debt: 0SZ's debt to equity ratio has increased from 237.8% to 476.8% over the past 5 years.

Debt Coverage: 0SZ's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: Insufficient data to determine if 0SZ's interest payments on its debt are well covered by EBIT.


Balance Sheet


Next Steps

Dividend

What is Ready Capital's current dividend yield, its reliability and sustainability?

23.95%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 0SZ's dividend (33.33%) is higher than the bottom 25% of dividend payers in the German market (1.63%).

High Dividend: 0SZ's dividend (33.33%) is in the top 25% of dividend payers in the German market (4.61%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 0SZ has been paying a dividend for less than 10 years.

Growing Dividend: 0SZ has only been paying a dividend for 3 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (93%), 0SZ's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 0SZ's dividends in 3 years are not forecast to be well covered by earnings (110.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average management tenure


CEO

Tom Capasse (62yo)

3.5s

Tenure

Mr. Thomas Edward Capasse, also known as Tom, is a Manager and Co-Founder of Waterfall Asset Management, LLC (“Manager”). Mr. Capasse also serves as Chairman of board of directors and Chief Executive Offic ...


Leadership Team

NamePositionTenureCompensationOwnership
Thomas Capasse
Chairman & CEO3.5yrsno data0.61% $2.0m
Jack Ross
President & Director3.5yrsno data0.56% $1.8m
Andrew Ahlborn
CFO & Secretary0.83yrno data0.045% $145.1k
Gary Taylor
Chief Operating Officer1yrno data0.029% $95.4k
Thomas Buttacavoli
Chief Investment Officerno datano data0.21% $674.3k
Brian Dunn
Director of Finance Divisionno datano datano data

2.3yrs

Average Tenure

59yo

Average Age

Experienced Management: 0SZ's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Thomas Capasse
Chairman & CEO3.5yrsno data0.61% $2.0m
Jack Ross
President & Director3.5yrsno data0.56% $1.8m
J. Reese
Independent Director3.5yrsUS$155.00k0.12% $387.1k
Frank Filipps
Independent Director3.5yrsUS$165.00k0.052% $168.7k
Todd Sinai
Independent Director3.5yrsUS$152.50k0.059% $190.5k
David Holman
Independent Director5.08yrsUS$155.00k0.052% $168.7k
Gilbert Nathan
Independent Director1.08yrsno data0.028% $89.4k

3.5yrs

Average Tenure

62yo

Average Age

Experienced Board: 0SZ's board of directors are considered experienced (3.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 0SZ insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 30.9%.


Top Shareholders

Company Information

Ready Capital Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Ready Capital Corporation
  • Ticker: 0SZ
  • Exchange: MUN
  • Founded: 2007
  • Industry: Mortgage REITs
  • Sector: Diversified Financials
  • Implied Market Cap: US$355.005m
  • Market Cap: US$317.828m
  • Listing Market Cap: US$324.652m
  • Shares outstanding: 53.14m
  • Website: https://www.readycapital.com

Number of Employees


Location

  • Ready Capital Corporation
  • 1140 Avenue of the Americas
  • 7th Floor
  • New York
  • New York
  • 10036
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RCNYSE (New York Stock Exchange)YesCommon StockUSUSDNov 2016
A2ATTTDB (Deutsche Boerse AG)YesCommon StockDEEURNov 2016
0SZMUN (Boerse Muenchen)YesCommon StockDEEURNov 2016

Biography

Ready Capital Corporation operates as a real estate finance company in the United States. The company originates, acquires, finances, and services small balance commercial (SBC) loans, small business administration (SBA) loans, and residential mortgage loans, as well as mortgage backed securities collateralized primarily by SBC loans, or other real estate-related investments. It operates through four segments: Loan Acquisitions; SBC Originations; SBA Originations, Acquisitions and Servicing; and Residential Mortgage Banking. The Loan Acquisitions segment acquires performing and non-performing SBC loans. The SBC Originations segment originates SBC loans secured by stabilized or transitional investor properties using various loan origination channels; and originates and services multi-family loan products. The SBA Originations, Acquisitions and Servicing segment acquires, originates, and services owner-occupied loans guaranteed by the SBA. The Residential Mortgage Banking segment originates residential mortgage loans through retail, correspondent, and broker channels. 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 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. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/10 08:33
End of Day Share Price2020/04/09 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.