Ladder Capital (NYSE:LADR) and Blackstone Mortgage Trust (NYSE:BXMT) Critical Survey

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

Institutional and Insider Ownership

64.2% of Blackstone Mortgage Trust shares are owned by institutional investors. Comparatively, 62.3% of Ladder Capital shares are owned by institutional investors. 1.2% of Blackstone Mortgage Trust shares are owned by insiders. Comparatively, 12.6% 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.

Analyst Ratings

This is a breakdown of recent ratings for Blackstone Mortgage Trust and Ladder Capital, as provided by MarketBeat.com.

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

Blackstone Mortgage Trust presently has a consensus target price of $17.00, suggesting a potential upside of 53.50%. Ladder Capital has a consensus target price of $12.29, suggesting a potential upside of 39.85%. Given Blackstone Mortgage Trust’s higher possible upside, research analysts plainly believe Blackstone Mortgage Trust is more favorable than Ladder Capital.

Profitability

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

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

Risk and Volatility

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

Dividends

Blackstone Mortgage Trust pays an annual dividend of $1.88 per share and has a dividend yield of 17.0%. Ladder Capital pays an annual dividend of $0.92 per share and has a dividend yield of 10.5%. Blackstone Mortgage Trust pays out -84.3% of its earnings in the form of a dividend. 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blackstone Mortgage Trust	$1.36 billion	1.36	$109.57 million	($2.23)	-4.97
Ladder Capital	$268.36 million	4.12	$64.18 million	$0.80	10.98

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.

Summary

Ladder Capital beats Blackstone Mortgage Trust on 8 of the 15 factors compared between the two stocks.

About Blackstone Mortgage Trust

Blackstone Mortgage Trust, Inc. is a real estate investment trust focused on commercial real estate finance. The company originates and acquires commercial mortgage loans, primarily senior loans secured by income-producing properties. Its investments span major commercial real estate markets in North America, Europe and Australia. Blackstone Mortgage Trust is externally managed by an affiliate of Blackstone and draws on the firm’s real estate investment platform. The company was formerly known as Capital Trust, Inc. and adopted the Blackstone Mortgage Trust name in 2013.

About Ladder Capital

Ladder Capital Corp. is a commercial real estate finance company organized as a real estate investment trust. It originates and invests in loans and other assets tied to commercial properties, with a focus on first mortgage loans secured by real estate. The company also invests in commercial mortgage-backed securities and U.S. government securities, and owns commercial real estate. Its lending and investment activities span property types and markets across the United States. Founded in 2008, Ladder Capital is headquartered in New York.