Franklin BSP Realty Trust (NYSE:FBRT – Get Rating) and Ladder Capital (NYSE:LADR – Get Rating) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.
Franklin BSP Realty Trust pays an annual dividend of $1.42 per share and has a dividend yield of 11.0%. Ladder Capital pays an annual dividend of $0.92 per share and has a dividend yield of 9.8%. Franklin BSP Realty Trust pays out 236.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ladder Capital pays out 78.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ladder Capital has increased its dividend for 1 consecutive years.
Insider & Institutional Ownership
57.4% of Franklin BSP Realty Trust shares are held by institutional investors. Comparatively, 59.1% of Ladder Capital shares are held by institutional investors. 0.3% of Franklin BSP Realty Trust shares are held by company insiders. Comparatively, 11.7% of Ladder Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Valuation and Earnings
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Franklin BSP Realty Trust||$201.65 million||5.26||$14.43 million||$0.60||21.47|
|Ladder Capital||$544.59 million||2.18||$142.22 million||$1.17||8.03|
Ladder Capital has higher revenue and earnings than Franklin BSP Realty Trust. Ladder Capital is trading at a lower price-to-earnings ratio than Franklin BSP Realty Trust, indicating that it is currently the more affordable of the two stocks.
This table compares Franklin BSP Realty Trust and Ladder Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Franklin BSP Realty Trust||31.98%||10.88%||2.36%|
Risk and Volatility
Franklin BSP Realty Trust has a beta of 1.5, meaning that its stock price is 50% more volatile than the S&P 500. Comparatively, Ladder Capital has a beta of 1.88, meaning that its stock price is 88% more volatile than the S&P 500.
This is a summary of current ratings and price targets for Franklin BSP Realty Trust and Ladder Capital, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Franklin BSP Realty Trust||0||1||4||0||2.80|
Franklin BSP Realty Trust presently has a consensus target price of $14.75, suggesting a potential upside of 14.52%. Ladder Capital has a consensus target price of $11.25, suggesting a potential upside of 19.68%. Given Ladder Capital’s higher probable upside, analysts clearly believe Ladder Capital is more favorable than Franklin BSP Realty Trust.
Ladder Capital beats Franklin BSP Realty Trust on 10 of the 17 factors compared between the two stocks.
About Franklin BSP Realty Trust
Benefit Street Partners operates as a self-managed real estate investment trust (REIT). BSP earns income from investing in a leveraged portfolio of residential mortgage pass-through securities consisting almost exclusively of adjustable-rate mortgage (ARM) securities issued and guaranteed by government-sponsored enterprises, either Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac) (together, the government-sponsored enterprises (GSEs)), or by an agency of the federal government, Government National Mortgage Association (Ginnie Mae). BSP’s investment strategy focuses on managing a portfolio of residential mortgage investments consisting almost exclusively of ARM Agency Securities. As of December 31, 2012, the Company’s securities consisted of Agency Securities classified as available-for-sale and Residential mortgage securities classified as held-to-maturity.
About Ladder Capital
Ladder Capital Corp. is a holding company, which engages in the provision of commercial real estate finance services. It operates through the following segments: Loans, Securities, Real Estate, and Corporate and Other. The Loans segment includes mortgage loan receivables held for investment and mortgage loan receivables held for sale. The Securities segment consists of all the company’s activities related to commercial real estate securities, as well as investments in commercial mortgage-backed securities, United States agency securities, corporate bonds, and equity securities. The Real Estate segment is involved in the net leased properties, office buildings, student housing portfolios, hotels, industrial buildings, a shopping center, and condominium units. The Corporate and Other segment represents the company’s investments in joint ventures, other asset management activities, and operating expenses. The company was founded by Pamela McCormack, Robert Perelman, and Brian Harris in October 2008 and is headquartered in New York, NY.
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