Analyzing Chatham Lodging Trust (NYSE:CLDT) and Ladder Capital (NYSE:LADR)

Chatham Lodging Trust (NYSE:CLDT) and Ladder Capital (NYSE:LADR) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Risk and Volatility

Chatham Lodging Trust has a beta of 1.8, indicating that its stock price is 80% more volatile than the S&P 500. Comparatively, Ladder Capital has a beta of 1.94, indicating that its stock price is 94% more volatile than the S&P 500.

Earnings & Valuation

This table compares Chatham Lodging Trust and Ladder Capital’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chatham Lodging Trust	$311.11 million	1.35	$2.64 million	($0.12)	-71.67
Ladder Capital	$534.41 million	2.82	$101.12 million	$0.76	15.49

Ladder Capital has higher revenue and earnings than Chatham Lodging Trust. Chatham Lodging 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 & Insider Ownership

88.4% of Chatham Lodging Trust shares are owned by institutional investors. Comparatively, 62.3% of Ladder Capital shares are owned by institutional investors. 6.5% of Chatham Lodging Trust shares are owned by insiders. Comparatively, 12.0% of Ladder Capital shares are owned by 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 summary of current ratings and recommmendations for Chatham Lodging Trust and Ladder Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chatham Lodging Trust	0	0	1	0	3.00
Ladder Capital	0	1	5	0	2.83

Chatham Lodging Trust presently has a consensus price target of $13.00, suggesting a potential upside of 51.16%. Ladder Capital has a consensus price target of $13.33, suggesting a potential upside of 13.28%. Given Chatham Lodging Trust’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Chatham Lodging Trust is more favorable than Ladder Capital.

Dividends

Chatham Lodging Trust pays an annual dividend of $0.28 per share and has a dividend yield of 3.3%. Ladder Capital pays an annual dividend of $0.92 per share and has a dividend yield of 7.8%. Chatham Lodging Trust pays out -233.3% of its earnings in the form of a dividend. Ladder Capital pays out 121.1% 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 Chatham Lodging Trust and Ladder Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chatham Lodging Trust	0.73%	0.28%	0.17%
Ladder Capital	19.07%	9.17%	2.62%

Summary

Ladder Capital beats Chatham Lodging Trust on 12 of the 16 factors compared between the two stocks.

About Chatham Lodging Trust

Chatham Lodging Trust is a self-advised, publicly traded real estate investment trust (REIT) focused primarily on investing in upscale, extended-stay hotels and premium-branded, select-service hotels. The company owns 39 hotels totaling 5,915 rooms/suites in 16 states and the District of Columbia.

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.