Chicago Atlantic Real Estate Finance (NASDAQ:REFI – Get Free Report) and Sunrise Realty Trust (NASDAQ:SUNS – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.
Profitability
This table compares Chicago Atlantic Real Estate Finance and Sunrise Realty Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Chicago Atlantic Real Estate Finance | 54.57% | 11.53% | 8.06% |
| Sunrise Realty Trust | 53.33% | 8.25% | 4.90% |
Insider & Institutional Ownership
25.5% of Chicago Atlantic Real Estate Finance shares are held by institutional investors. 6.5% of Chicago Atlantic Real Estate Finance shares are held by insiders. Comparatively, 28.5% of Sunrise Realty Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Chicago Atlantic Real Estate Finance | 0 | 3 | 2 | 0 | 2.40 |
| Sunrise Realty Trust | 1 | 2 | 0 | 0 | 1.67 |
Chicago Atlantic Real Estate Finance presently has a consensus price target of $15.33, suggesting a potential upside of 51.07%. Sunrise Realty Trust has a consensus price target of $8.00, suggesting a potential upside of 3.23%. Given Chicago Atlantic Real Estate Finance’s stronger consensus rating and higher possible upside, analysts clearly believe Chicago Atlantic Real Estate Finance is more favorable than Sunrise Realty Trust.
Earnings & Valuation
This table compares Chicago Atlantic Real Estate Finance and Sunrise Realty Trust”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Chicago Atlantic Real Estate Finance | $55.39 million | 4.69 | $36.01 million | $1.37 | 7.41 |
| Sunrise Realty Trust | $21.57 million | 4.86 | $12.14 million | $0.97 | 7.99 |
Chicago Atlantic Real Estate Finance has higher revenue and earnings than Sunrise Realty Trust. Chicago Atlantic Real Estate Finance is trading at a lower price-to-earnings ratio than Sunrise Realty Trust, indicating that it is currently the more affordable of the two stocks.
Dividends
Chicago Atlantic Real Estate Finance pays an annual dividend of $1.88 per share and has a dividend yield of 18.5%. Sunrise Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 15.5%. Chicago Atlantic Real Estate Finance pays out 137.2% 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. Chicago Atlantic Real Estate Finance has raised its dividend for 1 consecutive years. Chicago Atlantic Real Estate Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Chicago Atlantic Real Estate Finance has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500. Comparatively, Sunrise Realty Trust has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500.
Summary
Chicago Atlantic Real Estate Finance beats Sunrise Realty Trust on 12 of the 17 factors compared between the two stocks.
About Chicago Atlantic Real Estate Finance
Chicago Atlantic Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. The company engages in originating, structuring, and investing in first mortgage loans and alternative structured financings secured by commercial real estate properties. Its portfolio primarily includes offers senior loans to state-licensed operators in the cannabis industry. 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. Chicago Atlantic Real Estate Finance, Inc. was incorporated in 2021 and is headquartered in Chicago, Illinois.
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.
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