Reviewing Ladder Capital (NYSE:LADR) & Federal Realty Investment Trust (NYSE:FRT)

Federal Realty Investment Trust (NYSE:FRT) and Ladder Capital (NYSE:LADR) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Risk & Volatility

Federal Realty Investment Trust has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500. Comparatively, Ladder Capital has a beta of 1.91, indicating that its share price is 91% more volatile than the S&P 500.

Institutional and Insider Ownership

93.9% of Federal Realty Investment Trust shares are owned by institutional investors. Comparatively, 62.3% of Ladder Capital shares are owned by institutional investors. 1.0% of Federal Realty Investment 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, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Federal Realty Investment Trust pays an annual dividend of $4.40 per share and has a dividend yield of 4.5%. Ladder Capital pays an annual dividend of $0.92 per share and has a dividend yield of 7.9%. Federal Realty Investment Trust pays out 128.3% 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 107.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federal Realty Investment Trust has increased its dividend for 58 consecutive years. Ladder Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Federal Realty Investment Trust and Ladder Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Federal Realty Investment Trust	24.38%	9.89%	3.48%
Ladder Capital	21.36%	8.77%	2.61%

Analyst Recommendations

This is a summary of recent ratings and price targets for Federal Realty Investment Trust and Ladder Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Federal Realty Investment Trust	0	3	10	0	2.77
Ladder Capital	0	1	4	1	3.00

Federal Realty Investment Trust presently has a consensus price target of $119.77, indicating a potential upside of 22.83%. Ladder Capital has a consensus price target of $13.29, indicating a potential upside of 14.14%. Given Federal Realty Investment Trust’s higher possible upside, research analysts clearly believe Federal Realty Investment Trust is more favorable than Ladder Capital.

Earnings and Valuation

This table compares Federal Realty Investment Trust and Ladder Capital”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Federal Realty Investment Trust	$1.20 billion	6.95	$295.21 million	$3.43	28.43
Ladder Capital	$277.48 million	5.33	$108.25 million	$0.86	13.54

Federal Realty Investment Trust has higher revenue and earnings than Ladder Capital. Ladder Capital is trading at a lower price-to-earnings ratio than Federal Realty Investment Trust, indicating that it is currently the more affordable of the two stocks.

Summary

Federal Realty Investment Trust beats Ladder Capital on 12 of the 18 factors compared between the two stocks.

About Federal Realty Investment Trust

Federal Realty Investment Trust is an equity real estate investment trust, which engages in the provision of ownership, management, and redevelopment of retail and mixed-use properties located primarily in communities where demand exceeds supply in strategically selected metropolitan markets. The company was founded in 1962 and is headquartered in North Bethesda, MD.

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.