Ladder Capital (NYSE:LADR) & Ellington Financial (NYSE:EFC) Financial Comparison

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ladder Capital	21.81%	7.82%	2.42%
Ellington Financial	101.59%	12.06%	0.95%

Dividends

Ladder Capital pays an annual dividend of $0.92 per share and has a dividend yield of 8.5%. Ellington Financial pays an annual dividend of $1.56 per share and has a dividend yield of 11.9%. 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. Ellington Financial pays out 110.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ellington Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current recommendations for Ladder Capital and Ellington Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ladder Capital	0	1	3	1	3.00
Ellington Financial	0	1	3	0	2.75

Ladder Capital currently has a consensus price target of $13.20, indicating a potential upside of 21.83%. Ellington Financial has a consensus price target of $14.83, indicating a potential upside of 12.76%. Given Ladder Capital’s stronger consensus rating and higher possible upside, research analysts plainly believe Ladder Capital is more favorable than Ellington Financial.

Institutional and Insider Ownership

62.3% of Ladder Capital shares are owned by institutional investors. Comparatively, 55.6% of Ellington Financial shares are owned by institutional investors. 12.0% of Ladder Capital shares are owned by insiders. Comparatively, 4.1% of Ellington Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Ladder Capital has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, Ellington Financial has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.

Earnings and Valuation

This table compares Ladder Capital and Ellington Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ladder Capital	$506.84 million	2.74	$108.25 million	$0.82	13.21
Ellington Financial	$136.41 million	9.11	$145.86 million	$1.41	9.33

Ellington Financial has lower revenue, but higher earnings than Ladder Capital. Ellington Financial is trading at a lower price-to-earnings ratio than Ladder Capital, indicating that it is currently the more affordable of the two stocks.

Summary

Ladder Capital beats Ellington Financial on 9 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 Ellington Financial

Ellington Financial Inc., through its subsidiary, Ellington Financial Operating Partnership LLC, acquires and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the United States. The company acquires and manages residential mortgage-backed securities (RMBS) backed by prime jumbo, Alt-A, manufactured housing, and subprime mortgage; RMBS for which the principal and interest payments are guaranteed by the U.S. government agency or the U.S. government-sponsored entity; residential mortgage loans; commercial mortgage-backed securities; and commercial mortgage loans and other commercial real estate debt. It also provides collateralized loan obligations; mortgage-related and non-mortgage-related derivatives; corporate debt and equity securities; corporate loans; and other strategic investments; and consumer loans and asset-backed securities backed by consumer and commercial assets. The company qualifies as a real estate investment trust (REIT) for federal income tax purposes. As a REIT, it intends to distribute at least 90% of its taxable income as dividends to shareholders. Ellington Financial LLC was incorporated in 2007 and is headquartered in Old Greenwich, Connecticut.