Comparing Arbor Realty Trust (NYSE:ABR) and Adamas Trust (NASDAQ:ADAM)

Adamas Trust (NASDAQ:ADAM) and Arbor Realty Trust (NYSE:ABR) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Dividends

Adamas Trust pays an annual dividend of $1.08 per share and has a dividend yield of 11.0%. Arbor Realty Trust pays an annual dividend of $0.68 per share and has a dividend yield of 12.7%. Adamas Trust pays out 64.3% of its earnings in the form of a dividend. Arbor Realty Trust pays out 971.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

54.9% of Adamas Trust shares are held by institutional investors. Comparatively, 57.3% of Arbor Realty Trust shares are held by institutional investors. 2.0% of Adamas Trust shares are held by company insiders. Comparatively, 4.2% of Arbor 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 will outperform the market over the long term.

Valuation & Earnings

This table compares Adamas Trust and Arbor Realty Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adamas Trust	$601.95 million	1.47	$149.05 million	$1.68	5.85
Arbor Realty Trust	$472.13 million	2.11	$148.80 million	$0.07	76.36

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

Volatility and Risk

Adamas Trust has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, Arbor Realty Trust has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500.

Profitability

This table compares Adamas Trust and Arbor Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Adamas Trust	29.82%	14.72%	1.04%
Arbor Realty Trust	6.24%	7.38%	1.22%

Analyst Recommendations

This is a summary of current recommendations for Adamas Trust and Arbor Realty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adamas Trust	0	3	1	1	2.60
Arbor Realty Trust	4	1	1	0	1.50

Adamas Trust presently has a consensus price target of $9.50, indicating a potential downside of 3.26%. Arbor Realty Trust has a consensus price target of $6.00, indicating a potential upside of 12.25%. Given Arbor Realty Trust’s higher probable upside, analysts clearly believe Arbor Realty Trust is more favorable than Adamas Trust.

Summary

Adamas Trust beats Arbor Realty Trust on 9 of the 16 factors compared between the two stocks.

About Adamas Trust

New York Mortgage Trust, Inc. acquires, invests in, finances, and manages mortgage-related single-family and multi-family residential assets in the United States. Its targeted investments include residential loans, second mortgages, and business purpose loans; structured multi-family property investments, such as preferred equity in, and mezzanine loans to owners of multi-family properties, as well as joint venture equity investments in multi-family properties; non-agency residential mortgage-backed securities (RMBS); agency RMBS; commercial mortgage-backed securities (CMBS); and other mortgage, residential housing, and credit-related assets. 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 incorporated in 2003 and is headquartered in New York, New York.

About Arbor Realty Trust

Arbor Realty Trust, Inc. invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States. The company operates through Structured Business and Agency Business segments. It primarily invests in bridge and mezzanine loans, including junior participating interests in first mortgages, and preferred and direct equity, as well as real estate-related joint ventures, real estate-related notes, and various mortgage-related securities. In addition, the company offers bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property; financing by making preferred equity investments in entities that directly or indirectly own real property; mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction; junior participation financing in the form of a junior participating interest in the senior debt; and financing products to borrowers who are looking to acquire conventional, workforce, and affordable single-family housing. Further, it underwrites, originates, sells, and services multifamily mortgage loans through conduit/commercial mortgage-backed securities programs. 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. Arbor Realty Trust, Inc. was incorporated in 2003 and is headquartered in Uniondale, New York.