Head to Head Analysis: One Liberty Properties (OLP) and RAIT Financial Trust (RAS)

RAIT Financial Trust (NYSE: RAS) and One Liberty Properties (NYSE:OLP) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, analyst recommendations, risk, institutional ownership, profitability and earnings.

Profitability



This table compares RAIT Financial Trust and One Liberty Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RAIT Financial Trust -137.66% -0.59% -0.08%
One Liberty Properties 32.44% 8.31% 3.30%

Insider & Institutional Ownership

57.9% of RAIT Financial Trust shares are owned by institutional investors. Comparatively, 41.6% of One Liberty Properties shares are owned by institutional investors. 1.3% of RAIT Financial Trust shares are owned by insiders. Comparatively, 8.6% of One Liberty Properties shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares RAIT Financial Trust and One Liberty Properties’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
RAIT Financial Trust $173.61 million 0.21 $25.34 million ($1.80) -0.22
One Liberty Properties $70.59 million 6.68 $24.42 million $1.32 19.03

RAIT Financial Trust has higher revenue and earnings than One Liberty Properties. RAIT Financial Trust is trading at a lower price-to-earnings ratio than One Liberty Properties, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

RAIT Financial Trust has a beta of 1.66, indicating that its share price is 66% more volatile than the S&P 500. Comparatively, One Liberty Properties has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500.

Dividends

RAIT Financial Trust pays an annual dividend of $0.20 per share and has a dividend yield of 50.0%. One Liberty Properties pays an annual dividend of $1.72 per share and has a dividend yield of 6.8%. RAIT Financial Trust pays out -11.1% of its earnings in the form of a dividend. One Liberty Properties pays out 130.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RAIT Financial Trust has increased its dividend for 4 consecutive years. RAIT Financial Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for RAIT Financial Trust and One Liberty Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RAIT Financial Trust 1 3 0 0 1.75
One Liberty Properties 0 3 0 0 2.00

RAIT Financial Trust currently has a consensus target price of $1.43, indicating a potential upside of 256.25%. One Liberty Properties has a consensus target price of $25.00, indicating a potential downside of 0.48%. Given RAIT Financial Trust’s higher possible upside, equities research analysts clearly believe RAIT Financial Trust is more favorable than One Liberty Properties.

Summary

RAIT Financial Trust beats One Liberty Properties on 8 of the 15 factors compared between the two stocks.

About RAIT Financial Trust

RAIT Financial Trust (RAIT) is a real estate investment trust (REIT). The Company focuses on providing commercial real estate (CRE) financing throughout the United States. The core of its business is a full service CRE lending platform focused on first lien loans. It offers customized lending solutions to meet borrower needs and internal credit goals. It offers personalized middle-market financing solutions and a complement of lending products for CRE. The Company may also offer mezzanine loans and preferred equity interests in limited circumstances to support first lien loans. It is engaged in floating rate securitization programs and has access to multiple sources of funding, including senior debt, convertible securities, preferred securities and common securities. The Company also owns and manages a portfolio of CRE properties, and manages real estate assets for third parties. The Company is engaged in lending, owning and managing CRE assets throughout the United States.

About One Liberty Properties

One Liberty Properties, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company acquires, owns and manages a geographically diversified portfolio consisting of retail, industrial, flex, and health and fitness properties. As of December 31, 2016, the Company owned 114 properties and participated in joint ventures that own five properties. These 119 properties are located in 30 states and have an aggregate of approximately 10.1 million square feet (including an aggregate of approximately 1.2 million square feet at properties owned by its joint ventures). As of December 31, 2016, the Company’s property locations included Fort Mill, South Carolina; Royersford, Pennsylvania; Round Rock, Texas; W.Hartford, Connecticut; Delport, Missouri; Brooklyn, New York City; Lakemoor, Illinois; Tucker, Georgia; Cedar Park, Texas; Lake Charles, Louisiana; Sandy Springs, Georgia; Wichita, Kansas; Melville, New York; Ronkonkoma, New York, and Niles, Illinois.

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