Head-To-Head Review: Rithm Capital (NYSE:RITM) versus American Assets Trust (NYSE:AAT)

American Assets Trust (NYSE:AAT) and Rithm Capital (NYSE:RITM) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.

Dividends

American Assets Trust pays an annual dividend of $1.34 per share and has a dividend yield of 5.1%. Rithm Capital pays an annual dividend of $1.00 per share and has a dividend yield of 9.3%. American Assets Trust pays out 150.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rithm Capital pays out 66.7% of its earnings in the form of a dividend. Rithm Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares American Assets Trust and Rithm Capital”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Assets Trust	$445.27 million	3.62	$64.69 million	$0.89	29.74
Rithm Capital	$2.44 billion	2.14	$622.26 million	$1.50	7.20

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for American Assets Trust and Rithm Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Assets Trust	0	1	0	0	2.00
Rithm Capital	0	1	8	0	2.89

American Assets Trust currently has a consensus price target of $26.00, suggesting a potential downside of 1.78%. Rithm Capital has a consensus price target of $12.67, suggesting a potential upside of 17.28%. Given Rithm Capital’s stronger consensus rating and higher possible upside, analysts plainly believe Rithm Capital is more favorable than American Assets Trust.

Risk and Volatility

American Assets Trust has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500. Comparatively, Rithm Capital has a beta of 1.8, suggesting that its share price is 80% more volatile than the S&P 500.

Profitability

This table compares American Assets Trust and Rithm Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Assets Trust	12.00%	4.62%	1.78%
Rithm Capital	15.55%	18.04%	2.63%

Insider & Institutional Ownership

90.4% of American Assets Trust shares are held by institutional investors. Comparatively, 44.9% of Rithm Capital shares are held by institutional investors. 37.3% of American Assets Trust shares are held by insiders. Comparatively, 0.4% of Rithm Capital shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Rithm Capital beats American Assets Trust on 12 of the 16 factors compared between the two stocks.

About American Assets Trust

American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust ("REIT"), headquartered in San Diego, California. The company has over 55 years of experience in acquiring, improving, developing and managing premier office, retail, and residential properties throughout the United States in some of the nation's most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Washington, Oregon, Texas and Hawaii. The company's office portfolio comprises approximately 4.1 million rentable square feet, and its retail portfolio comprises approximately 3.1 million rentable square feet. In addition, the company owns one mixed-use property (including approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,110 multifamily units. In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes.

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.