Head to Head Contrast: Blackstone Mortgage Trust (NYSE:BXMT) and Ladder Capital (NYSE:LADR)

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

Earnings & Valuation

This table compares Ladder Capital and Blackstone Mortgage Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ladder Capital	$390.29 million	2.94	$64.18 million	$0.80	11.38
Blackstone Mortgage Trust	$1.36 billion	1.35	$109.57 million	($2.23)	-4.96

Blackstone Mortgage Trust has higher revenue and earnings than Ladder Capital. Blackstone Mortgage 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.

Dividends

Ladder Capital pays an annual dividend of $0.92 per share and has a dividend yield of 10.1%. Blackstone Mortgage Trust pays an annual dividend of $1.88 per share and has a dividend yield of 17.0%. Ladder Capital pays out 115.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blackstone Mortgage Trust pays out -84.3% of its earnings in the form of a dividend. Blackstone Mortgage Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

62.3% of Ladder Capital shares are owned by institutional investors. Comparatively, 64.2% of Blackstone Mortgage Trust shares are owned by institutional investors. 12.6% of Ladder Capital shares are owned by company insiders. Comparatively, 1.2% of Blackstone Mortgage Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ladder Capital	23.70%	6.98%	1.81%
Blackstone Mortgage Trust	-48.18%	9.17%	1.56%

Analyst Ratings

This is a summary of current recommendations and price targets for Ladder Capital and Blackstone Mortgage Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ladder Capital	0	3	4	0	2.57
Blackstone Mortgage Trust	1	4	4	0	2.33

Ladder Capital presently has a consensus target price of $12.29, suggesting a potential upside of 34.96%. Blackstone Mortgage Trust has a consensus target price of $17.00, suggesting a potential upside of 53.61%. Given Blackstone Mortgage Trust’s higher probable upside, analysts clearly believe Blackstone Mortgage Trust is more favorable than Ladder Capital.

Volatility and Risk

Ladder Capital has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, Blackstone Mortgage Trust has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.

Summary

Ladder Capital beats Blackstone Mortgage Trust on 8 of the 15 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 Blackstone Mortgage Trust

Blackstone Mortgage Trust, Inc., a real estate finance company, originates senior loans collateralized by commercial properties in North America, Europe, and Australia. The company originates and acquires senior floating rate mortgage loans that are secured by a first-priority mortgage on commercial real estate assets. It operates as a real estate investment trust for federal income tax purposes. The company was formerly known as Capital Trust, Inc. and changed its name to Blackstone Mortgage Trust, Inc. in May 2013. Blackstone Mortgage Trust, Inc. was incorporated in 1998 and is headquartered in New York, New York.