Analyzing Sunrise Realty Trust (NASDAQ:SUNS) and Arbor Realty Trust (NYSE:ABR)

Arbor Realty Trust (NYSE:ABR) and Sunrise Realty Trust (NASDAQ:SUNS) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Arbor Realty Trust	6.24%	7.38%	1.22%
Sunrise Realty Trust	53.33%	8.25%	4.90%

Dividends

Arbor Realty Trust pays an annual dividend of $0.68 per share and has a dividend yield of 13.4%. Sunrise Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 15.9%. Arbor Realty Trust pays out 971.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sunrise Realty Trust pays out 123.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sunrise Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Arbor Realty Trust has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, Sunrise Realty Trust has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500.

Insider & Institutional Ownership

57.3% of Arbor Realty Trust shares are held by institutional investors. 4.2% of Arbor Realty Trust shares are held by company insiders. Comparatively, 28.5% of Sunrise Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Arbor Realty Trust and Sunrise Realty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arbor Realty Trust	4	1	1	0	1.50
Sunrise Realty Trust	1	2	0	0	1.67

Arbor Realty Trust currently has a consensus target price of $6.00, indicating a potential upside of 18.34%. Sunrise Realty Trust has a consensus target price of $8.00, indicating a potential upside of 5.96%. Given Arbor Realty Trust’s higher probable upside, research analysts plainly believe Arbor Realty Trust is more favorable than Sunrise Realty Trust.

Earnings & Valuation

This table compares Arbor Realty Trust and Sunrise Realty Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arbor Realty Trust	$472.13 million	2.00	$148.80 million	$0.07	72.43
Sunrise Realty Trust	$21.57 million	4.73	$12.14 million	$0.97	7.78

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

Summary

Sunrise Realty Trust beats Arbor Realty Trust on 9 of the 16 factors compared between the two stocks.

About Arbor Realty Trust

Arbor Realty Trust, Inc. invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States. The company operates through Structured Business and Agency Business segments. It primarily invests in bridge and mezzanine loans, including junior participating interests in first mortgages, and preferred and direct equity, as well as real estate-related joint ventures, real estate-related notes, and various mortgage-related securities. In addition, the company offers bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property; financing by making preferred equity investments in entities that directly or indirectly own real property; mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction; junior participation financing in the form of a junior participating interest in the senior debt; and financing products to borrowers who are looking to acquire conventional, workforce, and affordable single-family housing. Further, it underwrites, originates, sells, and services multifamily mortgage loans through conduit/commercial mortgage-backed securities programs. 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. Arbor Realty Trust, Inc. was incorporated in 2003 and is headquartered in Uniondale, New York.

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.