Head-To-Head Analysis: Ladder Capital Corp (LADR) and Western Asset Mortgage Capital Corporation (WMC)

Ladder Capital Corp (NASDAQ: LADR) and Western Asset Mortgage Capital Corporation (NYSE:WMC) are both small-cap financials companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Profitability

This table compares Ladder Capital Corp and Western Asset Mortgage Capital Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ladder Capital Corp 22.29% 5.35% 1.37%
Western Asset Mortgage Capital Corporation 30.83% 5.97% 0.83%

Earnings and Valuation

This table compares Ladder Capital Corp and Western Asset Mortgage Capital Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ladder Capital Corp $325.34 million 3.59 N/A N/A N/A
Western Asset Mortgage Capital Corporation $59.85 million 7.38 $34.37 million $0.82 12.84

Western Asset Mortgage Capital Corporation has higher revenue, but lower earnings than Ladder Capital Corp.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Ladder Capital Corp and Western Asset Mortgage Capital Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ladder Capital Corp 0 1 5 0 2.83
Western Asset Mortgage Capital Corporation 0 2 0 0 2.00

Ladder Capital Corp presently has a consensus target price of $15.67, suggesting a potential upside of 15.37%. Western Asset Mortgage Capital Corporation has a consensus target price of $10.00, suggesting a potential downside of 5.03%. Given Ladder Capital Corp’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Ladder Capital Corp is more favorable than Western Asset Mortgage Capital Corporation.

Institutional and Insider Ownership

38.0% of Western Asset Mortgage Capital Corporation shares are owned by institutional investors. 0.4% of Western Asset Mortgage Capital Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Western Asset Mortgage Capital Corporation pays an annual dividend of $1.24 per share and has a dividend yield of 11.8%. Ladder Capital Corp does not pay a dividend. Western Asset Mortgage Capital Corporation pays out 151.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Western Asset Mortgage Capital Corporation beats Ladder Capital Corp on 7 of the 13 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 Western Asset Mortgage Capital Corporation

Western Asset Mortgage Capital Corporation is a real estate investment trust. The Company is focused on investing in, financing and managing a diversified portfolio of real estate-related securities, whole-loans and other financial assets. The Company’s portfolio includes Agency residential mortgage-backed securities (RMBS), including Mortgage pass-through certificates, Agency derivatives, Agency Interest-Only Strips and Agency collateralized mortgage obligations (CMOs); Non-Agency RMBS, and Agency commercial mortgage-backed securities (CMBS), Non-Agency CMBS, Non United States CMBS and asset-backed securities (ABS), as well as Residential and Commercial Whole-Loans. The Company may utilize to-be-announced forward contracts (TBAs), in order to invest in Agency RMBS. The Company’s manager is Western Asset Management Company.

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