Elme Communities (NYSE:ELME – Get Free Report) and BrightSpire Capital (NYSE:BRSP – Get Free Report) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, earnings, risk, valuation, institutional ownership and profitability.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Elme Communities and BrightSpire Capital, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Elme Communities | 0 | 3 | 1 | 0 | 2.25 |
| BrightSpire Capital | 0 | 3 | 3 | 0 | 2.50 |
Elme Communities currently has a consensus price target of $17.67, indicating a potential upside of 10.67%. BrightSpire Capital has a consensus price target of $7.69, indicating a potential upside of 53.29%. Given BrightSpire Capital’s stronger consensus rating and higher probable upside, analysts clearly believe BrightSpire Capital is more favorable than Elme Communities.
Volatility and Risk
Institutional & Insider Ownership
87.9% of Elme Communities shares are owned by institutional investors. Comparatively, 56.6% of BrightSpire Capital shares are owned by institutional investors. 1.2% of Elme Communities shares are owned by company insiders. Comparatively, 1.9% of BrightSpire Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares Elme Communities and BrightSpire Capital”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Elme Communities | $241.94 million | 5.81 | -$13.10 million | ($0.14) | -114.02 |
| BrightSpire Capital | $347.22 million | 1.87 | -$15.55 million | ($1.05) | -4.78 |
Elme Communities has higher earnings, but lower revenue than BrightSpire Capital. Elme Communities is trading at a lower price-to-earnings ratio than BrightSpire Capital, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Elme Communities and BrightSpire Capital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Elme Communities | -5.42% | -1.18% | -0.70% |
| BrightSpire Capital | -79.23% | 8.82% | 2.55% |
Dividends
Elme Communities pays an annual dividend of $0.72 per share and has a dividend yield of 4.5%. BrightSpire Capital pays an annual dividend of $0.64 per share and has a dividend yield of 12.8%. Elme Communities pays out -514.3% of its earnings in the form of a dividend. BrightSpire Capital pays out -61.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Summary
BrightSpire Capital beats Elme Communities on 10 of the 16 factors compared between the two stocks.
About Elme Communities
Elme Communities is committed to elevating what home can be for middle-income renters by providing a higher level of quality, service, and experience. The Company is a multifamily real estate investment trust that owns and operates approximately 9,400 apartment homes in the Washington, DC metro and the Atlanta metro regions, and owns approximately 300,000 square feet of commercial space. Focused on providing quality, affordable homes to a deep, solid, and underserved base of mid-market demand, Elme Communities is building long-term value for shareholders.
About BrightSpire Capital
BrightSpire Capital, Inc. operates as a commercial real estate (CRE) credit real estate investment trust in the United States and Europe. The company operates through Senior and Mezzanine Loans and Preferred Equity; Net Leased and Other Real Estate; and Corporate and Other segments. It focuses on originating, acquiring, financing, and managing a diversified portfolio of CRE debt investments consisting of first mortgage loans, senior loans, debt securities, mezzanine loans, and preferred equity investments, as well as net leased properties. 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 Colony Credit Real Estate, Inc. and changed its name to BrightSpire Capital, Inc. in June 2021. BrightSpire Capital, Inc. was incorporated in 2017 and is headquartered in New York, New York.
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