Head-To-Head Analysis: Independence Realty Trust (NYSE:IRT) & Chicago Atlantic Real Estate Finance (NASDAQ:REFI)

Chicago Atlantic Real Estate Finance (NASDAQ:REFI) and Independence Realty Trust (NYSE:IRT) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Analyst Ratings

This is a breakdown of current recommendations for Chicago Atlantic Real Estate Finance and Independence Realty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chicago Atlantic Real Estate Finance	0	0	2	1	3.33
Independence Realty Trust	0	2	4	0	2.67

Chicago Atlantic Real Estate Finance currently has a consensus target price of $20.00, indicating a potential upside of 28.62%. Independence Realty Trust has a consensus target price of $21.33, indicating a potential upside of 4.37%. Given Chicago Atlantic Real Estate Finance’s stronger consensus rating and higher probable upside, research analysts plainly believe Chicago Atlantic Real Estate Finance is more favorable than Independence Realty Trust.

Dividends

Chicago Atlantic Real Estate Finance pays an annual dividend of $1.88 per share and has a dividend yield of 12.1%. Independence Realty Trust pays an annual dividend of $0.64 per share and has a dividend yield of 3.1%. Chicago Atlantic Real Estate Finance pays out 94.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Independence Realty Trust pays out 355.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chicago Atlantic Real Estate Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

25.5% of Chicago Atlantic Real Estate Finance shares are held by institutional investors. Comparatively, 88.3% of Independence Realty Trust shares are held by institutional investors. 12.3% of Chicago Atlantic Real Estate Finance shares are held by company insiders. Comparatively, 0.6% of Independence Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Chicago Atlantic Real Estate Finance and Independence Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chicago Atlantic Real Estate Finance	64.57%	13.17%	10.10%
Independence Realty Trust	6.15%	1.11%	0.66%

Valuation and Earnings

This table compares Chicago Atlantic Real Estate Finance and Independence Realty Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chicago Atlantic Real Estate Finance	$57.15 million	5.34	$38.71 million	$2.00	7.78
Independence Realty Trust	$640.03 million	7.37	$39.29 million	$0.18	113.56

Independence Realty Trust has higher revenue and earnings than Chicago Atlantic Real Estate Finance. Chicago Atlantic Real Estate Finance is trading at a lower price-to-earnings ratio than Independence Realty Trust, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Chicago Atlantic Real Estate Finance has a beta of 0.23, meaning that its share price is 77% less volatile than the S&P 500. Comparatively, Independence Realty Trust has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500.

Summary

Chicago Atlantic Real Estate Finance beats Independence Realty Trust on 10 of the 17 factors compared between the two stocks.

About Chicago Atlantic Real Estate Finance

Chicago Atlantic Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. The company engages in originating, structuring, and investing in first mortgage loans and alternative structured financings secured by commercial real estate properties. Its portfolio primarily includes offers senior loans to state-licensed operators in the cannabis industry. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Chicago Atlantic Real Estate Finance, Inc. was incorporated in 2021 and is headquartered in Chicago, Illinois.

About Independence Realty Trust

Independence Realty Trust, Inc. (NYSE: IRT) is a real estate investment trust that owns and operates multifamily communities, across non-gateway U.S. markets including Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Raleigh-Durham, NC, Oklahoma City, OK, Nashville, TN, Houston, TX, and Tampa, FL. IRT’s investment strategy is focused on gaining scale near major employment centers within key amenity rich submarkets that offer good school districts and high-quality retail. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation.