Ladder Capital (NYSE:LADR – Get Free Report) and Diversified Healthcare Trust (NASDAQ:DHC – Get Free Report) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Ladder Capital and Diversified Healthcare Trust, as reported by MarketBeat.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Ladder Capital | 0 | 1 | 4 | 1 | 3.00 |
Diversified Healthcare Trust | 1 | 1 | 0 | 1 | 2.33 |
Ladder Capital currently has a consensus price target of $13.17, indicating a potential upside of 24.37%. Diversified Healthcare Trust has a consensus price target of $3.75, indicating a potential upside of 4.46%. Given Ladder Capital’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Ladder Capital is more favorable than Diversified Healthcare Trust.
Profitability
Net Margins | Return on Equity | Return on Assets | |
Ladder Capital | 21.36% | 8.77% | 2.61% |
Diversified Healthcare Trust | -26.09% | -17.55% | -7.20% |
Risk and Volatility
Ladder Capital has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, Diversified Healthcare Trust has a beta of 2.45, suggesting that its stock price is 145% more volatile than the S&P 500.
Earnings and Valuation
This table compares Ladder Capital and Diversified Healthcare Trust”s revenue, earnings per share and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Ladder Capital | $261.13 million | 5.19 | $108.25 million | $0.82 | 12.91 |
Diversified Healthcare Trust | $1.51 billion | 0.57 | -$293.57 million | ($1.22) | -2.94 |
Ladder Capital has higher earnings, but lower revenue than Diversified Healthcare Trust. Diversified Healthcare 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.
Dividends
Ladder Capital pays an annual dividend of $0.92 per share and has a dividend yield of 8.7%. Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 1.1%. Ladder Capital pays out 112.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Diversified Healthcare Trust pays out -3.3% of its earnings in the form of a dividend.
Insider and Institutional Ownership
62.3% of Ladder Capital shares are held by institutional investors. Comparatively, 76.0% of Diversified Healthcare Trust shares are held by institutional investors. 12.0% of Ladder Capital shares are held by company insiders. Comparatively, 1.4% of Diversified Healthcare Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Summary
Ladder Capital beats Diversified Healthcare Trust on 12 of the 16 factors compared between the two stocks.
About Ladder Capital
Ladder Capital Corp operates as an internally-managed real estate investment trust in the United States. It operates through three segments: Loans, Securities, and Real Estate. The Loans segment originates conduit first mortgage loans that are secured by cash-flowing commercial real estate; and originates and invests in balance sheet first mortgage loans secured by commercial real estate properties that are undergoing transition, including lease-up, sell-out, and renovation or repositioning. It also invests in note purchase financings, subordinated debt, mezzanine debt, and other structured finance products related to commercial real estate. The Securities segment invests in commercial mortgage-backed securities, U.S. treasury and agency, corporate bonds, and equity securities. The Real Estate segment owns and invests in a portfolio of commercial and residential real estate properties, such as leased properties, office buildings, student housing portfolios, hotels, industrial buildings, shopping center, and condominium units. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2008 and is headquartered in New York, New York.
About Diversified Healthcare Trust
Diversified Healthcare Trust is a real estate investment trust, which engages in the ownership of senior living communities, medical office buildings, and wellness centers. It operates through the following segments: Office Portfolio, Senior Housing Operating Portfolio (SHOP), and Non-Segment. The Office Portfolio segment consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. The SHOP segment manages senior living communities that offers short term and long term residential care, and other services for residents where it pay fees to the operator to manage the communities for its account. The company was founded on December 16, 1998 and is headquartered in Newton, MA.
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