Analyzing Rithm Capital (NYSE:RITM) & ACRES Commercial Realty (NYSE:ACR)

ACRES Commercial Realty (NYSE:ACR) and Rithm Capital (NYSE:RITM) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, institutional ownership, risk, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current recommendations for ACRES Commercial Realty and Rithm Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ACRES Commercial Realty	1	1	2	0	2.25
Rithm Capital	0	1	10	0	2.91

ACRES Commercial Realty currently has a consensus price target of $24.50, suggesting a potential upside of 73.39%. Rithm Capital has a consensus price target of $13.15, suggesting a potential upside of 31.17%. Given ACRES Commercial Realty’s higher possible upside, research analysts clearly believe ACRES Commercial Realty is more favorable than Rithm Capital.

Insider and Institutional Ownership

40.0% of ACRES Commercial Realty shares are held by institutional investors. Comparatively, 44.9% of Rithm Capital shares are held by institutional investors. 4.6% of ACRES Commercial Realty shares are held by company insiders. Comparatively, 0.6% of Rithm Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

ACRES Commercial Realty has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500. Comparatively, Rithm Capital has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Valuation & Earnings

This table compares ACRES Commercial Realty and Rithm Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ACRES Commercial Realty	$79.95 million	1.26	$21.32 million	($1.12)	-12.62
Rithm Capital	$3.32 billion	1.69	$681.45 million	$0.60	16.71

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

Profitability

This table compares ACRES Commercial Realty and Rithm Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ACRES Commercial Realty	22.62%	2.42%	0.58%
Rithm Capital	9.20%	19.86%	2.84%

Summary

Rithm Capital beats ACRES Commercial Realty on 11 of the 14 factors compared between the two stocks.

About ACRES Commercial Realty

ACRES Commercial Realty Corp., a real estate investment trust (REIT), focuses on the origination, holding, and management of commercial real estate mortgage loans and equity investments in commercial real estate property in the United States. It invests in commercial real estate-related assets, including floating-rate first mortgage loans, first priority interests in first mortgage loans, subordinated interests in first mortgage loans, mezzanine financing, preferred equity investments, and commercial mortgage-backed securities. 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. The company was formerly known as Exantas Capital Corp. and changed its name to ACRES Commercial Realty Corp. in February 2021. ACRES Commercial Realty Corp. was incorporated in 2005 and is based in Uniondale, New York.

About Rithm Capital

Rithm Capital Corp. operates as an asset manager focused on real estate, credit, and financial services. It operates through Origination and Servicing, Investment Portfolio, Mortgage Loans Receivable, and Asset Management segments. Its investment portfolio primarily comprises of mortgage servicing rights (MSR), and MSR financing receivables, title, appraisal and property preservation, excess MSRs, and services advance investments; real estate securities, call rights, SFR properties, and residential mortgage loans; consumer and business purpose loans; and asset management related investments. 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. The company was formerly known as New Residential Investment Corp. and changed its name to Rithm Capital Corp. in August 2022. Rithm Capital Corp. was incorporated in 2011 and is based in New York, New York.