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

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

Risk and Volatility

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ladder Capital	12.62%	5.92%	1.64%
Adamas Trust	29.82%	14.72%	1.04%

Dividends

Ladder Capital pays an annual dividend of $0.92 per share and has a dividend yield of 10.1%. Adamas Trust pays an annual dividend of $1.08 per share and has a dividend yield of 12.8%. 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 pays out 64.3% of its earnings in the form of a dividend. Adamas Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ladder Capital	$390.29 million	2.95	$64.18 million	$0.42	21.60
Adamas Trust	$601.95 million	1.26	$149.05 million	$1.68	5.01

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.

Institutional and Insider Ownership

62.3% of Ladder Capital shares are owned by institutional investors. Comparatively, 54.9% of Adamas Trust shares are owned by institutional investors. 12.6% of Ladder Capital shares are owned by company insiders. Comparatively, 2.0% of Adamas Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and price targets for Ladder Capital and Adamas Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ladder Capital	1	2	4	0	2.43
Adamas Trust	0	4	1	1	2.50

Ladder Capital currently has a consensus target price of $12.36, indicating a potential upside of 36.18%. Adamas Trust has a consensus target price of $9.50, indicating a potential upside of 12.76%. Given Ladder Capital’s higher possible upside, research analysts clearly believe Ladder Capital is more favorable than Adamas Trust.

Summary

Adamas Trust beats Ladder Capital on 10 of the 17 factors compared between the two stocks.

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.

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.