Head-To-Head Analysis: Ladder Capital (LADR) vs. AGNC Investment (AGNC)

Ladder Capital (NYSE: LADR) and AGNC Investment (NASDAQ:AGNC) are both financials companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, dividends, valuation, earnings, profitability and analyst recommendations.

Profitability

This table compares Ladder Capital and AGNC Investment’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%
AGNC Investment 86.72% 12.17% 1.54%

Valuation and Earnings

This table compares Ladder Capital and AGNC Investment’s top-line 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 4.00 $66.72 million $0.87 16.61
AGNC Investment $769.00 million 9.45 $771.00 million $1.96 9.48

AGNC Investment has higher revenue and earnings than Ladder Capital. AGNC Investment 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 Ratings

This is a breakdown of current ratings for Ladder Capital and AGNC Investment, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ladder Capital 0 0 5 0 3.00
AGNC Investment 0 4 2 0 2.33

Ladder Capital presently has a consensus price target of $16.25, suggesting a potential upside of 12.30%. AGNC Investment has a consensus price target of $19.75, suggesting a potential upside of 6.30%. Given Ladder Capital’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Ladder Capital is more favorable than AGNC Investment.

Insider and Institutional Ownership

46.6% of Ladder Capital shares are owned by institutional investors. Comparatively, 65.6% of AGNC Investment shares are owned by institutional investors. 12.5% of Ladder Capital shares are owned by company insiders. Comparatively, 0.5% of AGNC Investment shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Ladder Capital has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500. Comparatively, AGNC Investment has a beta of -0.01, suggesting that its stock price is 101% less volatile than the S&P 500.

Dividends

Ladder Capital pays an annual dividend of $1.26 per share and has a dividend yield of 8.7%. AGNC Investment pays an annual dividend of $2.16 per share and has a dividend yield of 11.6%. 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. AGNC Investment pays out 110.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AGNC Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

AGNC Investment beats Ladder Capital on 9 of the 16 factors compared between the two stocks.

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.

AGNC Investment Company Profile

AGNC Investment Corp., formerly American Capital Agency Corp., is a real estate investment trust. The Company invests in agency residential mortgage-backed securities on a leveraged basis. Its investments consist of residential mortgage pass-through securities and collateralized mortgage obligations (CMOs) for which the principal and interest payments are guaranteed by a government-sponsored enterprise, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), or by the United States Government agency, such as the Government National Mortgage Association (Ginnie Mae) (collectively, GSEs). Its agency securities include agency residential mortgage-backed securities (Agency RMBS) and to-be-announced forward contracts (TBAs). Its Non-Agency Securities include credit risk transfer securities (CRT), non-agency residential mortgage-backed securities (Non-Agency RMBS) and commercial mortgage-backed securities (CMBS).

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