We assign a fundamental rating of 3 out of 10 to RC. RC was compared to 68 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. The financial health of RC is average, but there are quite some concerns on its profitability. RC does not seem to be growing, but still is valued expensively.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

RC had negative earnings in the past year.
RC had a positive operating cash flow in the past year.
RC had positive earnings in 4 of the past 5 years.
RC had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

Looking at the Return On Assets, with a value of -3.93%, RC is doing worse than 83.82% of the companies in the same industry.
RC's Return On Equity of -18.38% is on the low side compared to the rest of the industry. RC is outperformed by 85.29% of its industry peers.

		Industry Rank	Sector Rank
ROA	-3.93%
ROE	-18.38%
ROIC	N/A

ROA(3y)-0.12%

ROA(5y)0.39%

ROE(3y)-0.69%

ROE(5y)2.85%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

Looking at the Gross Margin, with a value of 17.50%, RC is doing worse than 73.53% of the companies in the same industry.
In the last couple of years the Gross Margin of RC has declined.
RC does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.

		Industry Rank	Sector Rank
OM	N/A
PM (TTM)	N/A
GM	17.5%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y-50.56%

GM growth 5Y-31.49%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

RC does not have a ROIC to compare to the WACC, probably because it is not profitable.
Compared to 1 year ago, RC has less shares outstanding
Compared to 5 years ago, RC has more shares outstanding
The debt/assets ratio for RC is higher compared to a year ago.

2.2 Solvency

Based on the Altman-Z score of -0.07, we must say that RC is in the distress zone and has some risk of bankruptcy.
RC has a Altman-Z score (-0.07) which is comparable to the rest of the industry.
RC has a debt to FCF ratio of 12.72. This is a negative value and a sign of low solvency as RC would need 12.72 years to pay back of all of its debts.
The Debt to FCF ratio of RC (12.72) is better than 95.59% of its industry peers.
A Debt/Equity ratio of 3.49 is on the high side and indicates that RC has dependencies on debt financing.
RC has a Debt to Equity ratio of 3.49. This is in the better half of the industry: RC outperforms 69.12% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	3.49
Debt/FCF	12.72
Altman-Z	-0.07

ROIC/WACCN/A

WACC6.55%

2.3 Liquidity

RC has a Current Ratio of 1.03. This is a normal value and indicates that RC is financially healthy and should not expect problems in meeting its short term obligations.
RC's Current ratio of 1.03 is fine compared to the rest of the industry. RC outperforms 79.41% of its industry peers.
RC has a Quick Ratio of 1.03. This is a normal value and indicates that RC is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Quick ratio value of 1.03, RC is doing good in the industry, outperforming 79.41% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	1.03
Quick Ratio	1.03

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

RC shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -452.94%.
Measured over the past years, RC shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -49.62% on average per year.
The Revenue has decreased by -8.20% in the past year.
Measured over the past years, RC shows a very strong growth in Revenue. The Revenue has been growing by 20.46% on average per year.

EPS 1Y (TTM)-452.94%

EPS 3Y-71.84%

EPS 5Y-49.62%

EPS Q2Q%-235.71%

Revenue 1Y (TTM)-8.2%

Revenue growth 3Y14.39%

Revenue growth 5Y20.46%

Sales Q2Q%-79.36%

3.2 Future

The Earnings Per Share is expected to decrease by -47.91% on average over the next years. This is quite bad
RC is expected to show a very negative growth in Revenue. In the coming years, the Revenue will decrease by -19.66% yearly.

EPS Next Y-2151.76%

EPS Next 2Y-255.09%

EPS Next 3Y-47.91%

EPS Next 5YN/A

Revenue Next Year-72.17%

Revenue Next 2Y-44.33%

Revenue Next 3Y-19.66%

Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings Ratio is negative for RC. In the last year negative earnings were reported.
Also next year RC is expected to report negative earnings again, which makes the also the Forward Price/Earnings Ratio negative.

		Industry Rank	Sector Rank
PE	N/A
Fwd PE	N/A

4.2 Price Multiples

Compared to the rest of the industry, the Price/Free Cash Flow ratio of RC indicates a rather cheap valuation: RC is cheaper than 100.00% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	0.76
EV/EBITDA	N/A

4.3 Compensation for Growth

RC's earnings are expected to decrease with -47.91% in the coming years. This may justify a cheaper valuation.

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2Y-255.09%

EPS Next 3Y-47.91%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.81%, RC has a reasonable but not impressive dividend return.
In the last 3 months the price of RC has falen by -26.37%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 11.01, RC's dividend is way lower than its industry peers. On top of this 97.06% of the companies listed in the same industry pay a better dividend than RC!
RC's Dividend Yield is comparable with the S&P500 average which is at 1.82.

		Industry Rank	Sector Rank
Dividend Yield	1.81%

5.2 History

The dividend of RC decreases each year by -4.21%.
RC has been paying a dividend for at least 10 years, so it has a reliable track record.

Dividend Growth(5Y)-4.21%

Div Incr Years0

Div Non Decr Years0

5.3 Sustainability

The earnings of RC are negative and hence is the payout ratio. RC will probably not be able to sustain this dividend level.
RC's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.

DP-41.28%

EPS Next 2Y-255.09%

EPS Next 3Y-47.91%

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READY CAPITAL CORP / RC FAQ

What is the ChartMill fundamental rating of READY CAPITAL CORP (RC) stock?

ChartMill assigns a fundamental rating of 3 / 10 to RC.

What is the valuation status for RC stock?

ChartMill assigns a valuation rating of 2 / 10 to READY CAPITAL CORP (RC). This can be considered as Overvalued.

What is the profitability of RC stock?

READY CAPITAL CORP (RC) has a profitability rating of 1 / 10.

How sustainable is the dividend of READY CAPITAL CORP (RC) stock?

The dividend rating of READY CAPITAL CORP (RC) is 2 / 10 and the dividend payout ratio is -41.28%.