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

Dividends

Invesco Mortgage Capital pays an annual dividend of $1.64 per share and has a dividend yield of 9.4%. Ladder Capital Corp does not pay a dividend. Invesco Mortgage Capital pays out 37.8% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Invesco Mortgage Capital and Ladder Capital Corp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Invesco Mortgage Capital $609.31 million 3.21 $484.38 million $4.34 4.04
Ladder Capital Corp $325.34 million 3.65 N/A N/A N/A

Invesco Mortgage Capital has higher revenue and earnings than Ladder Capital Corp.

Institutional & Insider Ownership

63.4% of Invesco Mortgage Capital shares are owned by institutional investors. 0.3% of Invesco Mortgage Capital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Invesco Mortgage Capital and Ladder Capital Corp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Invesco Mortgage Capital 0 2 2 0 2.50
Ladder Capital Corp 0 1 5 0 2.83

Invesco Mortgage Capital currently has a consensus price target of $17.75, indicating a potential upside of 1.25%. Ladder Capital Corp has a consensus price target of $15.67, indicating a potential upside of 13.44%. Given Ladder Capital Corp’s stronger consensus rating and higher probable upside, analysts clearly believe Ladder Capital Corp is more favorable than Invesco Mortgage Capital.

Profitability

This table compares Invesco Mortgage Capital and Ladder Capital Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Invesco Mortgage Capital 71.92% 8.97% 1.11%
Ladder Capital Corp 15.32% 3.93% 0.89%

Summary

Invesco Mortgage Capital beats Ladder Capital Corp on 7 of the 13 factors compared between the two stocks.

Invesco Mortgage Capital Company Profile

Invesco Mortgage Capital Inc. is a holding company, which conducts its businesses through IAS Operating Partnership LP (the Operating Partnership) and subsidiaries. The Company’s objective is to provide risk-adjusted returns to its investors through dividends and through capital appreciation. It invests in residential mortgage-backed securities that are guaranteed by the United States Government agency, such as the Government National Mortgage Association or a federally chartered corporation, such as the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation (collectively Agency RMBS); RMBS that are not guaranteed by the United States Government agency; Credit risk transfer securities that are unsecured obligations issued by government-sponsored enterprises; commercial mortgage-backed securities; residential and commercial mortgage loans, and other real estate-related financing arrangements. It is externally managed and advised by Invesco Advisers, Inc.

Ladder Capital Corp Company Profile

Ladder Capital Corp is a commercial real estate finance company. The Company’s segments include loans, securities, real estate and corporate/other. The loans segment includes mortgage loan receivables held for investment (balance sheet loans) and mortgage loan receivables held for sale (conduit loans). The securities segment consists of all of its activities related to commercial real estate securities, which include investments in commercial mortgage-backed securities (CMBS) and United States Agency Securities. The real estate segment includes net leased properties, office buildings, a warehouse and condominium units. The Corporate/other segment includes the Company’s investments in joint ventures, other asset management activities and operating expenses. The Company invests primarily in loans, securities and other interests in the United States commercial real estate, with a focus on senior secured assets.

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