Reviewing Chicago Atlantic Real Estate Finance (NASDAQ:REFI) and Claros Mortgage Trust (NYSE:CMTG)

Chicago Atlantic Real Estate Finance (NASDAQ:REFI) and Claros Mortgage Trust (NYSE:CMTG) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, profitability, analyst recommendations, valuation and risk.

Volatility & Risk

Chicago Atlantic Real Estate Finance has a beta of 0.26, indicating that its stock price is 74% less volatile than the S&P 500. Comparatively, Claros Mortgage Trust has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500.

Profitability

This table compares Chicago Atlantic Real Estate Finance and Claros Mortgage Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chicago Atlantic Real Estate Finance	54.57%	11.53%	8.06%
Claros Mortgage Trust	-354.13%	-19.70%	-6.52%

Dividends

Chicago Atlantic Real Estate Finance pays an annual dividend of $1.88 per share and has a dividend yield of 20.1%. Claros Mortgage Trust pays an annual dividend of $0.40 per share and has a dividend yield of 32.9%. Chicago Atlantic Real Estate Finance pays out 137.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Claros Mortgage Trust pays out -10.4% of its earnings in the form of a dividend. Chicago Atlantic Real Estate Finance has increased its dividend for 1 consecutive years. Claros Mortgage Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Chicago Atlantic Real Estate Finance and Claros Mortgage Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chicago Atlantic Real Estate Finance	1	2	2	0	2.20
Claros Mortgage Trust	3	1	0	0	1.25

Chicago Atlantic Real Estate Finance presently has a consensus price target of $15.33, indicating a potential upside of 63.64%. Claros Mortgage Trust has a consensus price target of $2.08, indicating a potential upside of 71.47%. Given Claros Mortgage Trust’s higher probable upside, analysts clearly believe Claros Mortgage Trust is more favorable than Chicago Atlantic Real Estate Finance.

Institutional & Insider Ownership

25.5% of Chicago Atlantic Real Estate Finance shares are owned by institutional investors. Comparatively, 89.5% of Claros Mortgage Trust shares are owned by institutional investors. 6.5% of Chicago Atlantic Real Estate Finance shares are owned by insiders. Comparatively, 2.6% of Claros Mortgage Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Chicago Atlantic Real Estate Finance and Claros Mortgage Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chicago Atlantic Real Estate Finance	$55.39 million	4.33	$36.01 million	$1.37	6.84
Claros Mortgage Trust	$69.81 million	2.46	-$489.07 million	($3.83)	-0.32

Chicago Atlantic Real Estate Finance has higher earnings, but lower revenue than Claros Mortgage Trust. Claros Mortgage Trust is trading at a lower price-to-earnings ratio than Chicago Atlantic Real Estate Finance, indicating that it is currently the more affordable of the two stocks.

Summary

Chicago Atlantic Real Estate Finance beats Claros Mortgage Trust on 11 of the 17 factors compared between the two stocks.

About Chicago Atlantic Real Estate Finance

Chicago Atlantic Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. The company engages in originating, structuring, and investing in first mortgage loans and alternative structured financings secured by commercial real estate properties. Its portfolio primarily includes offers senior loans to state-licensed operators in the cannabis industry. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Chicago Atlantic Real Estate Finance, Inc. was incorporated in 2021 and is headquartered in Chicago, Illinois.

About Claros Mortgage Trust

Claros Mortgage Trust, Inc. operates as a real estate investment trust. It focuses on originating senior and subordinate loans on transitional commercial real estate assets in the United States. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was incorporated in 2015 and is headquartered in New York, New York.