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

Earnings & Valuation

This table compares Dynex Capital and Ladder Capital Corp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Dynex Capital $105.39 million 3.34 $75.82 million $1.54 4.65
Ladder Capital Corp $325.34 million 3.59 N/A N/A N/A

Dynex Capital has higher revenue, but lower earnings than Ladder Capital Corp.

Profitability

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

Net Margins Return on Equity Return on Assets
Dynex Capital 93.54% 11.04% 1.25%
Ladder Capital Corp 15.32% 3.93% 0.89%

Dividends

Dynex Capital pays an annual dividend of $0.72 per share and has a dividend yield of 10.1%. Ladder Capital Corp does not pay a dividend. Dynex Capital pays out 46.8% of its earnings in the form of a dividend.

Institutional and Insider Ownership

44.4% of Dynex Capital shares are owned by institutional investors. 7.1% of Dynex Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dynex Capital 0 2 0 0 2.00
Ladder Capital Corp 0 1 5 0 2.83

Dynex Capital currently has a consensus price target of $7.00, indicating a potential downside of 2.23%. Ladder Capital Corp has a consensus price target of $15.67, indicating a potential upside of 15.54%. Given Ladder Capital Corp’s stronger consensus rating and higher probable upside, analysts clearly believe Ladder Capital Corp is more favorable than Dynex Capital.

Summary

Ladder Capital Corp beats Dynex Capital on 7 of the 13 factors compared between the two stocks.

About Dynex Capital

Dynex Capital, Inc. is an internally managed mortgage real estate investment trust, which invests in residential and commercial mortgage securities on a leveraged basis. The Company’s objective is to provide attractive risk-adjusted returns to its shareholders over the long term that is reflective of a leveraged fixed income portfolio with a focus on capital preservation. It seeks to provide returns to its shareholders through regular quarterly dividends and through capital appreciation. It invests in Agency and non-Agency mortgage-backed securities (MBS). MBS consists of residential MBS (RMBS), commercial MBS (CMBS) and CMBS interest-only securities. Agency MBS have a guaranty of principal payment by an agency of the United States Government or a government-sponsored entity (GSE), such as Fannie Mae and Freddie Mac.

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.

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