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

Profitability

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

Net Margins Return on Equity Return on Assets
CYS Investments 111.68% 25.41% 2.80%
Ladder Capital 27.24% 8.57% 1.93%

Valuation & Earnings

This table compares CYS Investments and Ladder Capital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CYS Investments $294.54 million 4.05 $16.39 million ($0.20) -38.45
Ladder Capital $399.68 million 3.77 $66.72 million $0.87 15.62

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

Insider and Institutional Ownership

62.2% of CYS Investments shares are owned by institutional investors. Comparatively, 46.2% of Ladder Capital shares are owned by institutional investors. 1.0% of CYS Investments shares are owned by insiders. Comparatively, 12.5% of Ladder Capital shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

CYS Investments has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500. Comparatively, Ladder Capital has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for CYS Investments and Ladder Capital, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CYS Investments 0 3 0 0 2.00
Ladder Capital 0 0 4 0 3.00

CYS Investments currently has a consensus price target of $8.25, suggesting a potential upside of 7.28%. Ladder Capital has a consensus price target of $16.25, suggesting a potential upside of 19.57%. Given Ladder Capital’s stronger consensus rating and higher probable upside, analysts plainly believe Ladder Capital is more favorable than CYS Investments.

Dividends

CYS Investments pays an annual dividend of $1.00 per share and has a dividend yield of 13.0%. Ladder Capital pays an annual dividend of $1.26 per share and has a dividend yield of 9.3%. CYS Investments pays out -500.0% of its earnings in the form of a dividend. Ladder Capital pays out 144.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ladder Capital has increased its dividend for 2 consecutive years. CYS Investments is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Ladder Capital beats CYS Investments on 10 of the 17 factors compared between the two stocks.

CYS Investments Company Profile

CYS Investments, Inc. is a specialty finance company. The Company’s objective is to provide consistent returns to its investors through a combination of dividends and capital appreciation. It invests in agency residential mortgage-backed security (RMBS) collateralized by fixed rate single-family residential mortgage loans; adjustable-rate mortgages (ARMs), which have coupon rates that reset monthly, or hybrid ARMs, which have a coupon rate that is fixed for an initial period. In addition, it has investments in collateralized mortgage obligations issued by a government agency or government-sponsored entity (GSE) that are collateralized by Agency RMBS. Its investments consist of residential mortgage pass-through securities for which the principal and interest payments are guaranteed by a GSE, such as Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, or by the United States Government agency, such as Government National Mortgage Association.

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.

Receive News & Ratings for CYS Investments Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for CYS Investments and related companies with MarketBeat.com's FREE daily email newsletter.