Ladder Capital (NYSE: LADR) and Starwood Property Trust (NYSE:STWD) are both financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.
Insider and Institutional Ownership
46.9% of Ladder Capital shares are held by institutional investors. Comparatively, 68.8% of Starwood Property Trust shares are held by institutional investors. 12.5% of Ladder Capital shares are held by insiders. Comparatively, 2.4% of Starwood Property Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Ladder Capital has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, Starwood Property Trust has a beta of 0.22, indicating that its stock price is 78% less volatile than the S&P 500.
This is a breakdown of current recommendations for Ladder Capital and Starwood Property Trust, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Starwood Property Trust||0||0||2||0||3.00|
Ladder Capital presently has a consensus target price of $16.25, indicating a potential upside of 9.65%. Starwood Property Trust has a consensus target price of $24.00, indicating a potential upside of 18.58%. Given Starwood Property Trust’s higher probable upside, analysts plainly believe Starwood Property Trust is more favorable than Ladder Capital.
This table compares Ladder Capital and Starwood Property Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Starwood Property Trust||52.28%||11.88%||0.79%|
Earnings & Valuation
This table compares Ladder Capital and Starwood Property Trust’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Ladder Capital||$399.68 million||4.11||$66.72 million||$0.87||17.03|
|Starwood Property Trust||$784.67 million||6.73||$365.18 million||$1.66||12.19|
Starwood Property Trust has higher revenue and earnings than Ladder Capital. Starwood Property 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.
Ladder Capital pays an annual dividend of $1.26 per share and has a dividend yield of 8.5%. Starwood Property Trust pays an annual dividend of $1.92 per share and has a dividend yield of 9.5%. Ladder Capital pays out 144.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Starwood Property Trust pays out 115.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Starwood Property Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Starwood Property Trust beats Ladder Capital on 10 of the 15 factors compared between the two stocks.
About Ladder Capital
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.
About Starwood Property Trust
Starwood Property Trust, Inc. is a real estate investment trust. The Company operates through three business segments: Real estate lending (the Lending Segment), which engages primarily in originating, acquiring, financing and managing commercial first mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), residential mortgage-backed securities, and other real estate and real estate-related debt investments; Real estate investing and servicing (the Investing and Servicing Segment), which includes a servicing business in the United States that manages and works out problem assets; an investment business that selectively acquires and manages unrated, investment grade and non-investment grade rated CMBS, and a mortgage loan business, and Real estate property (the Property Segment), which engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties.
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