Analyzing Adamas Trust (NASDAQ:ADAM) and Seven Hills Realty Trust (NASDAQ:SEVN)

Adamas Trust (NASDAQ:ADAM) and Seven Hills Realty Trust (NASDAQ:SEVN) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Valuation and Earnings

This table compares Adamas Trust and Seven Hills Realty Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adamas Trust	$601.95 million	1.35	$149.05 million	$1.68	5.40
Seven Hills Realty Trust	$25.58 million	N/A	N/A	$1.46	5.17

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

Insider & Institutional Ownership

54.9% of Adamas Trust shares are owned by institutional investors. 2.0% of Adamas Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Adamas Trust and Seven Hills Realty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adamas Trust	0	3	1	1	2.60
Seven Hills Realty Trust	1	0	5	0	2.67

Adamas Trust presently has a consensus target price of $9.50, suggesting a potential upside of 4.74%. Seven Hills Realty Trust has a consensus target price of $10.38, suggesting a potential upside of 37.60%. Given Seven Hills Realty Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Seven Hills Realty Trust is more favorable than Adamas Trust.

Dividends

Adamas Trust pays an annual dividend of $1.08 per share and has a dividend yield of 11.9%. Seven Hills Realty Trust pays an annual dividend of $1.12 per share and has a dividend yield of 14.9%. Adamas Trust pays out 64.3% of its earnings in the form of a dividend. Seven Hills Realty Trust pays out 76.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Adamas Trust and Seven Hills 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%
Seven Hills Realty Trust	N/A	N/A	N/A

Summary

Adamas Trust beats Seven Hills Realty Trust on 10 of the 14 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 Seven Hills Realty Trust

Seven Hills Realty Trust, a real estate investment trust, focuses on originating and investing in first mortgage loans secured by middle market and transitional commercial real estate in the United States. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was formerly known as RMR Mortgage Trust. Seven Hills Realty Trust was incorporated in 2008 and is headquartered in Newton, Massachusetts.