Reviewing RAIT Financial Trust (RAS) & Brookfield Canada Office Properties (BOXC)
RAIT Financial Trust (NYSE: RAS) and Brookfield Canada Office Properties (NYSE:BOXC) are both small-cap financials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, risk, earnings, dividends, analyst recommendations, institutional ownership and valuation.
Insider and Institutional Ownership
52.0% of RAIT Financial Trust shares are owned by institutional investors. Comparatively, 20.1% of Brookfield Canada Office Properties shares are owned by institutional investors. 1.3% of RAIT Financial Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
RAIT Financial Trust pays an annual dividend of $0.14 per share and has a dividend yield of 29.8%. Brookfield Canada Office Properties pays an annual dividend of $0.97 per share. RAIT Financial Trust pays out -6.0% of its earnings in the form of a dividend. Brookfield Canada Office Properties pays out 83.6% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of recent ratings and target prices for RAIT Financial Trust and Brookfield Canada Office 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|
|Brookfield Canada Office Properties||0||1||0||0||2.00|
RAIT Financial Trust presently has a consensus price target of $1.43, suggesting a potential upside of 203.19%.
Earnings and Valuation
This table compares RAIT Financial Trust and Brookfield Canada Office Properties’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|RAIT Financial Trust||$173.61 million||0.25||$25.34 million||($2.34)||-0.20|
|Brookfield Canada Office Properties||N/A||N/A||N/A||$1.16||N/A|
RAIT Financial Trust has higher revenue and earnings than Brookfield Canada Office Properties. RAIT Financial Trust is trading at a lower price-to-earnings ratio than Brookfield Canada Office Properties, indicating that it is currently the more affordable of the two stocks.
This table compares RAIT Financial Trust and Brookfield Canada Office Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|RAIT Financial Trust||-137.66%||-0.66%||-0.09%|
|Brookfield Canada Office Properties||7.64%||1.26%||0.65%|
Risk & Volatility
RAIT Financial Trust has a beta of 1.99, indicating that its stock price is 99% more volatile than the S&P 500. Comparatively, Brookfield Canada Office Properties has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500.
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 Brookfield Canada Office Properties
Brookfield Canada Office Properties is a Canada-based real estate investment trust (REIT). The Company invests, develops and operates commercial office properties in Toronto, Ottawa, Calgary and Vancouver. The Company’s commercial-property portfolio consists of interests in approximately 25 properties totaling approximately 21.1 million square feet, including approximately 4.0 million square feet of parking and other. The Company’s development portfolio consists of the Brookfield Place Calgary East development site totaling approximately 1.4 million square feet in Calgary. The Company also invests in ongoing maintenance and capital improvement projects. The Company focuses on the markets, which include financial, government and energy sectors, which are primarily located in the cities of Toronto and Calgary. Its properties include 2 Queen Street East, Queen’s Quay Terminal, Exchange Tower, Bankers Hall Retail, Suncor Energy Centre, Jean Edmonds Tower and Royal Centre.
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