Ladder Capital Corp (NASDAQ: LADR) and Apollo Commercial Real Estate Finance (NYSE:ARI) are both small-cap financials companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, dividends, earnings, valuation, profitability, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current ratings for Ladder Capital Corp and Apollo Commercial Real Estate Finance, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ladder Capital Corp 0 1 5 0 2.83
Apollo Commercial Real Estate Finance 0 4 1 0 2.20

Ladder Capital Corp presently has a consensus target price of $15.67, indicating a potential upside of 19.96%. Apollo Commercial Real Estate Finance has a consensus target price of $18.50, indicating a potential upside of 4.23%. Given Ladder Capital Corp’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Ladder Capital Corp is more favorable than Apollo Commercial Real Estate Finance.

Earnings and Valuation

This table compares Ladder Capital Corp and Apollo Commercial Real Estate Finance’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ladder Capital Corp $325.34 million 3.45 N/A N/A N/A
Apollo Commercial Real Estate Finance $221.93 million 8.43 $223.53 million $2.12 8.37

Apollo Commercial Real Estate Finance has higher revenue, but lower earnings than Ladder Capital Corp.

Dividends

Apollo Commercial Real Estate Finance pays an annual dividend of $1.84 per share and has a dividend yield of 10.4%. Ladder Capital Corp does not pay a dividend. Apollo Commercial Real Estate Finance pays out 86.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apollo Commercial Real Estate Finance has raised its dividend for 2 consecutive years.

Profitability

This table compares Ladder Capital Corp and Apollo Commercial Real Estate Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ladder Capital Corp 15.32% 3.93% 0.89%
Apollo Commercial Real Estate Finance 93.54% 9.59% 5.20%

Insider & Institutional Ownership

64.9% of Apollo Commercial Real Estate Finance shares are owned by institutional investors. 0.6% of Apollo Commercial Real Estate Finance shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Apollo Commercial Real Estate Finance beats Ladder Capital Corp on 8 of the 14 factors compared between the two stocks.

About Ladder Capital Corp

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.

About Apollo Commercial Real Estate Finance

Apollo Commercial Real Estate Finance, Inc. is a real estate investment trust. The Company primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings, commercial mortgage-backed securities (CMBS) and other commercial real estate-related debt investments. The Company targets investments that are secured by institutional quality real estate. The Company’s principal business objective is to make investments in its target assets in order to provide attractive risk adjusted returns to its stockholders over the long term, primarily through dividends and secondarily through capital appreciation. The Company is externally managed and advised by ACREFI Management, LLC.

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