Comparing Ladder Capital (NYSE:LADR) and Hunt Companies Finance Trust (NYSE:HCFT)

Ladder Capital (NYSE:LADR) and Hunt Companies Finance Trust (NYSE:HCFT) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Dividends

Ladder Capital pays an annual dividend of $1.36 per share and has a dividend yield of 7.8%. Hunt Companies Finance Trust pays an annual dividend of $0.30 per share and has a dividend yield of 8.9%. Ladder Capital pays out 69.7% of its earnings in the form of a dividend. Hunt Companies Finance Trust pays out -96.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Hunt Companies Finance Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Ladder Capital and Hunt Companies Finance Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ladder Capital $595.14 million 3.50 $180.01 million $1.95 8.93
Hunt Companies Finance Trust $58.96 million 1.35 -$5.47 million ($0.31) -10.87

Ladder Capital has higher revenue and earnings than Hunt Companies Finance Trust. Hunt Companies Finance 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Ladder Capital 26.91% 12.05% 3.05%
Hunt Companies Finance Trust 18.92% 8.28% 1.38%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Ladder Capital and Hunt Companies Finance Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ladder Capital 0 2 1 0 2.33
Hunt Companies Finance Trust 0 0 1 0 3.00

Ladder Capital currently has a consensus target price of $17.75, indicating a potential upside of 1.89%. Hunt Companies Finance Trust has a consensus target price of $3.75, indicating a potential upside of 11.28%. Given Hunt Companies Finance Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Hunt Companies Finance Trust is more favorable than Ladder Capital.

Insider & Institutional Ownership

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49.5% of Ladder Capital shares are owned by institutional investors. Comparatively, 41.9% of Hunt Companies Finance Trust shares are owned by institutional investors. 12.0% of Ladder Capital shares are owned by insiders. Comparatively, 1.6% of Hunt Companies Finance Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Ladder Capital has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, Hunt Companies Finance Trust has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500.

Summary

Ladder Capital beats Hunt Companies Finance Trust on 10 of the 15 factors compared between the two stocks.

Ladder Capital Company Profile

Ladder Capital Corp operates as a real estate investment trust in the United States. The company 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 and the U.S. Agency Securities. This segment also invests in corporate bonds and real estate related equity investments. The Real Estate segment owns and invests in a portfolio of commercial and residential real estate properties, such as leased properties, student housing portfolio, industrial buildings, office 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. Ladder Capital Corp was founded in 2008 and is headquartered in New York, New York.

Hunt Companies Finance Trust Company Profile

Hunt Companies Finance Trust, Inc., a real estate specialty finance company, focuses on investing in portfolio mortgage-backed securities (MBS), mortgages, and other real estate related assets. It invests in agency and non-agency residential MBS, multi-family MBS, mortgage-servicing rights, and other mortgage-related investments. The company is qualified as a real estate investment trust (REIT) under the Internal Revenue Code. As a REIT, it would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as Five Oaks Investment Corp. and changed its name to Hunt Companies Finance Trust, Inc. in May 2018. Hunt Companies Finance Trust, Inc. was founded in 2012 and is headquartered in New York, New York.

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