Ladder Capital (NYSE:LADR) versus Rithm Property Trust (NYSE:RPT) Critical Analysis

Rithm Property Trust (NYSE:RPT) and Ladder Capital (NYSE:LADR) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.

Analyst Ratings

This is a summary of recent ratings for Rithm Property Trust and Ladder Capital, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rithm Property Trust	1	0	0	1	2.50
Ladder Capital	1	2	4	0	2.43

Ladder Capital has a consensus target price of $12.36, suggesting a potential upside of 43.97%. Given Ladder Capital’s higher possible upside, analysts plainly believe Ladder Capital is more favorable than Rithm Property Trust.

Earnings and Valuation

This table compares Rithm Property Trust and Ladder Capital”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rithm Property Trust	$52.80 million	1.61	$1.47 million	($0.26)	-41.96
Ladder Capital	$390.29 million	2.79	$64.18 million	$0.42	20.44

Ladder Capital has higher revenue and earnings than Rithm Property Trust. Rithm Property 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.

Institutional and Insider Ownership

58.6% of Rithm Property Trust shares are owned by institutional investors. Comparatively, 62.3% of Ladder Capital shares are owned by institutional investors. 0.4% of Rithm Property Trust shares are owned by company insiders. Comparatively, 12.6% of Ladder Capital shares are owned by company 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.

Profitability

This table compares Rithm Property Trust and Ladder Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rithm Property Trust	5.87%	1.20%	0.29%
Ladder Capital	12.62%	5.92%	1.64%

Risk and Volatility

Rithm Property Trust has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500. Comparatively, Ladder Capital has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500.

Dividends

Rithm Property Trust pays an annual dividend of $1.44 per share and has a dividend yield of 13.2%. Ladder Capital pays an annual dividend of $0.92 per share and has a dividend yield of 10.7%. Rithm Property Trust pays out -553.8% of its earnings in the form of a dividend. Ladder Capital pays out 219.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rithm Property Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Ladder Capital beats Rithm Property Trust on 12 of the 17 factors compared between the two stocks.

About Rithm Property Trust

Rithm Property Trust Inc is a real estate investment trust (REIT) externally managed by an affiliate of Rithm Capital Corp. (Rithm). The company focuses on commercial real estate-focused investment, including originating, acquiring and managing portfolios of CMBS, commercial real property, commercial mortgage loans and other CRE investments. It has two reportable operating segments: Residential and Commercial. The majority of the company’s revenue is derived from the Residential segment, which is focused on managing a portfolio that includes residential mortgage assets, including whole mortgage loans, RMBS and beneficial interests.

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.