SBA Communications (NASDAQ:SBAC – Get Free Report) and Starwood Property Trust (NYSE:STWD – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, dividends, valuation and analyst recommendations.
Risk and Volatility
SBA Communications has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, Starwood Property Trust has a beta of 1.69, indicating that its stock price is 69% more volatile than the S&P 500.
Profitability
This table compares SBA Communications and Starwood Property Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| SBA Communications | 20.61% | -10.75% | 5.40% |
| Starwood Property Trust | 21.20% | 9.99% | 0.96% |
Dividends
SBA Communications pays an annual dividend of $3.92 per share and has a dividend yield of 1.8%. Starwood Property Trust pays an annual dividend of $1.92 per share and has a dividend yield of 9.4%. SBA Communications pays out 76.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Starwood Property Trust pays out 138.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Analyst Ratings
This is a breakdown of current recommendations and price targets for SBA Communications and Starwood Property Trust, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| SBA Communications | 0 | 2 | 9 | 1 | 2.92 |
| Starwood Property Trust | 0 | 4 | 3 | 1 | 2.63 |
SBA Communications currently has a consensus price target of $248.31, indicating a potential upside of 15.91%. Starwood Property Trust has a consensus price target of $21.57, indicating a potential upside of 5.85%. Given SBA Communications’ stronger consensus rating and higher possible upside, analysts clearly believe SBA Communications is more favorable than Starwood Property Trust.
Valuation & Earnings
This table compares SBA Communications and Starwood Property Trust’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| SBA Communications | $2.69 billion | 8.54 | $501.81 million | $5.10 | 42.00 |
| Starwood Property Trust | $2.05 billion | 3.14 | $339.21 million | $1.39 | 14.66 |
SBA Communications has higher revenue and earnings than Starwood Property Trust. Starwood Property Trust is trading at a lower price-to-earnings ratio than SBA Communications, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
97.3% of SBA Communications shares are owned by institutional investors. Comparatively, 49.8% of Starwood Property Trust shares are owned by institutional investors. 1.3% of SBA Communications shares are owned by company insiders. Comparatively, 5.4% of Starwood Property Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Summary
SBA Communications beats Starwood Property Trust on 11 of the 16 factors compared between the two stocks.
About SBA Communications
SBA Communications Corporation is a leading independent owner and operator of wireless communications infrastructure including towers, buildings, rooftops, distributed antenna systems (DAS) and small cells. With a portfolio of more than 39,000 communications sites throughout the Americas, Africa and in Asia, SBA is listed on NASDAQ under the symbol SBAC. Our organization is part of the S&P 500 and is one of the top Real Estate Investment Trusts (REITs) by market capitalization.
About Starwood Property Trust
Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States and internationally. The company operates through Commercial and Residential Lending, Infrastructure Lending, Property, and Investing and Servicing segments. The Commercial and Residential Lending segment originates, acquires, finances, and manages commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), and residential mortgage-backed securities, as well as other real estate and real estate-related debt investments, include distressed or non-performing loans. The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments. The Property segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment. The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets that include properties acquired from CMBS trusts. The company qualifies as a REIT for federal income tax purposes and 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 incorporated in 2009 and is headquartered in Greenwich, Connecticut.
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