Ladder Capital (LADR) versus MFA Financial (MFA) Head-To-Head Contrast

Ladder Capital (NYSE: LADR) and MFA Financial (NYSE:MFA) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, profitability, analyst recommendations, earnings and risk.

Institutional & Insider Ownership

46.3% of Ladder Capital shares are owned by institutional investors. Comparatively, 80.7% of MFA Financial shares are owned by institutional investors. 12.5% of Ladder Capital shares are owned by company insiders. Comparatively, 0.9% of MFA Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Ladder Capital and MFA Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ladder Capital 27.38% 9.78% 2.40%
MFA Financial 59.03% 9.33% 2.50%

Valuation and Earnings

This table compares Ladder Capital and MFA Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ladder Capital $399.68 million 3.82 $66.72 million $1.22 11.31
MFA Financial $566.49 million 5.63 $312.66 million $0.73 11.01

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

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ladder Capital 0 1 4 0 2.80
MFA Financial 0 4 1 0 2.20

Ladder Capital currently has a consensus price target of $16.25, indicating a potential upside of 17.75%. MFA Financial has a consensus price target of $8.75, indicating a potential upside of 8.83%. Given Ladder Capital’s stronger consensus rating and higher probable upside, analysts plainly believe Ladder Capital is more favorable than MFA Financial.

Risk and Volatility

Ladder Capital has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500. Comparatively, MFA Financial has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500.

Dividends

Ladder Capital pays an annual dividend of $1.20 per share and has a dividend yield of 8.7%. MFA Financial pays an annual dividend of $0.80 per share and has a dividend yield of 10.0%. Ladder Capital pays out 98.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MFA Financial pays out 109.6% 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 Company Profile

Ladder Capital Corp is a commercial real estate finance company. The Company’s segments include loans, securities, real estate and corporate/other. The loans segment includes mortgage loan receivables held for investment (balance sheet loans) and mortgage loan receivables held for sale (conduit loans). The securities segment consists of all of its activities related to commercial real estate securities, which include investments in commercial mortgage-backed securities (CMBS) and United States Agency Securities. The real estate segment includes net leased properties, office buildings, a warehouse and condominium units. The Corporate/other segment includes the Company’s investments in joint ventures, other asset management activities and operating expenses. The Company invests primarily in loans, securities and other interests in the United States commercial real estate, with a focus on senior secured assets.

MFA Financial Company Profile

MFA Financial, Inc. is engaged in the real estate finance business. The Company’s subsidiaries invest in residential mortgage assets, including Non-Agency mortgage-backed securities (MBS), Agency MBS, residential whole loans and credit risk transfer (CRT) securities. The Company’s Non-Agency MBS portfolio primarily consists of Legacy Non-Agency MBS and 3 Year Step-up securities. In addition to Non-Agency MBS investments, the Company invests in re-performing and non-performing residential whole loans through its interests in certain consolidated trusts. The mortgages collateralizing its Agency MBS portfolio are predominantly Hybrids, 15-year fixed-rate mortgages and adjustable-rate mortgages (ARMs).

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