Head to Head Comparison: Ladder Capital (NYSE:LADR) versus Adamas Trust (NASDAQ:ADAM)

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

Analyst Recommendations

This is a breakdown of recent ratings for Adamas Trust and Ladder Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adamas Trust	0	5	1	0	2.17
Ladder Capital	1	2	4	0	2.43

Adamas Trust currently has a consensus target price of $9.50, indicating a potential upside of 19.80%. Ladder Capital has a consensus target price of $12.36, indicating a potential upside of 36.77%. Given Ladder Capital’s stronger consensus rating and higher probable upside, analysts plainly believe Ladder Capital is more favorable than Adamas Trust.

Dividends

Adamas Trust pays an annual dividend of $1.20 per share and has a dividend yield of 15.1%. Ladder Capital pays an annual dividend of $0.92 per share and has a dividend yield of 10.2%. Adamas Trust pays out 71.4% of its earnings in the form of a dividend. Ladder Capital pays out 219.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Adamas Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

54.9% of Adamas Trust shares are held by institutional investors. Comparatively, 62.3% of Ladder Capital shares are held by institutional investors. 2.0% of Adamas Trust shares are held by company insiders. Comparatively, 12.6% of Ladder Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Adamas Trust has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, Ladder Capital has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.

Profitability

This table compares Adamas Trust and Ladder Capital’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%
Ladder Capital	12.62%	5.92%	1.64%

Earnings & Valuation

This table compares Adamas Trust and Ladder Capital”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adamas Trust	$601.95 million	1.18	$149.05 million	$1.68	4.72
Ladder Capital	$213.44 million	5.37	$64.18 million	$0.42	21.51

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

Ladder Capital Corp operates as an internally-managed real estate investment trust in the United States. It operates through three segments: Loans, Securities, and Real Estate. The Loans segment originates conduit first mortgage loans that are secured by cash-flowing commercial real estate; and originates and invests in balance sheet first mortgage loans secured by commercial real estate properties that are undergoing transition, including lease-up, sell-out, and renovation or repositioning. It also invests in note purchase financings, subordinated debt, mezzanine debt, and other structured finance products related to commercial real estate. The Securities segment invests in commercial mortgage-backed securities, U.S. treasury and agency, corporate bonds, and equity securities. The Real Estate segment owns and invests in a portfolio of commercial and residential real estate properties, such as leased properties, office buildings, student housing portfolios, hotels, industrial buildings, shopping center, and condominium units. 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 founded in 2008 and is headquartered in New York, New York.