Jernigan Capital (NYSE: JCAP) and QTS Realty Trust (NYSE:QTS) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.

Dividends

Jernigan Capital pays an annual dividend of $1.40 per share and has a dividend yield of 7.4%. QTS Realty Trust pays an annual dividend of $1.56 per share and has a dividend yield of 2.9%. Jernigan Capital pays out 69.7% of its earnings in the form of a dividend. QTS Realty Trust pays out 390.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Jernigan Capital has raised its dividend for 2 consecutive years. Jernigan Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Jernigan Capital and QTS Realty Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Jernigan Capital $7.80 million 34.41 $28.62 million $2.01 9.38
QTS Realty Trust $422.74 million 6.24 $158.07 million $0.40 135.08

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

Insider and Institutional Ownership

60.6% of Jernigan Capital shares are held by institutional investors. 3.2% of Jernigan Capital shares are held by insiders. Comparatively, 17.3% of QTS Realty Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and target prices for Jernigan Capital and QTS Realty Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jernigan Capital 0 1 2 0 2.67
QTS Realty Trust 0 4 9 0 2.69

Jernigan Capital presently has a consensus price target of $25.33, suggesting a potential upside of 34.39%. QTS Realty Trust has a consensus price target of $56.92, suggesting a potential upside of 5.34%. Given Jernigan Capital’s higher possible upside, research analysts clearly believe Jernigan Capital is more favorable than QTS Realty Trust.

Risk and Volatility

Jernigan Capital has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500. Comparatively, QTS Realty Trust has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500.

Profitability

This table compares Jernigan Capital and QTS Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Jernigan Capital 185.96% 9.37% 7.91%
QTS Realty Trust 4.60% 2.04% 0.93%

Summary

Jernigan Capital beats QTS Realty Trust on 11 of the 17 factors compared between the two stocks.

About Jernigan Capital

Jernigan Capital, Inc. is a commercial real estate finance company. The Company provides capital to private developers, owners and operators of self-storage facilities. It intends to generate long-term returns on development property investments through a fixed rate of interest on its invested capital together with an interest in the positive cash flows of the self-storage development from operations, sales and/or refinancings. It generates cash flows from construction loans and operating property loans in the form of a fixed interest rate and origination fees. It originates various loans, such as bridge loans and credit lines. It has development property investments in Orlando, Atlanta, Tampa, Chicago and Miami. Its operating property loans are located in New Orleans, Newark, Nashville, Sacramento and Chicago. The Company conducts its investment activities through Jernigan Capital Operating Company, LLC. The Company is externally managed and advised by JCap Advisors, LLC.

About QTS Realty Trust

QTS Realty Trust, Inc. (QTS) is a provider of secure, compliant data center solutions, hybrid cloud and fully managed services. The Company owns, develops and operates carrier-neutral and multi-tenant data centers. Its data centers are facilities that house the network and computer equipment of multiple customers and provide access to a range of communications carriers. The Company has an integrated platform through which it owns and operates its data centers and provides a range of information technology (IT) infrastructure solutions. Its spectrum of core data center products is referred to as 3Cs, which consists of Custom Data Center (C1), Colocation (C2), and Cloud and Managed Services (C3). Its 3C integrated technology platform provides information technology solutions for Web and information technology applications. Its data centers facilities are used by its customers to house, power and cool the networking equipment and computer systems that support their business processes.

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