Ladder Capital (NYSE:LADR) versus PennyMac Mortgage Investment Trust (NYSE:PMT) Head to Head Review

Ladder Capital (NYSE:LADR) and PennyMac Mortgage Investment Trust (NYSE:PMT) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, valuation, earnings and profitability.

Dividends

Ladder Capital pays an annual dividend of $0.92 per share and has a dividend yield of 8.3%. PennyMac Mortgage Investment Trust pays an annual dividend of $1.60 per share and has a dividend yield of 13.5%. Ladder Capital pays out 131.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PennyMac Mortgage Investment Trust pays out 222.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Ladder Capital and PennyMac Mortgage Investment Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ladder Capital	20.05%	7.07%	2.24%
PennyMac Mortgage Investment Trust	34.65%	7.68%	0.71%

Institutional & Insider Ownership

62.3% of Ladder Capital shares are owned by institutional investors. Comparatively, 67.4% of PennyMac Mortgage Investment Trust shares are owned by institutional investors. 12.0% of Ladder Capital shares are owned by company insiders. Comparatively, 0.9% of PennyMac Mortgage Investment Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Ladder Capital and PennyMac Mortgage Investment Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ladder Capital	$506.84 million	2.77	$108.25 million	$0.70	15.75
PennyMac Mortgage Investment Trust	$334.19 million	3.09	$160.98 million	$0.72	16.49

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

Volatility & Risk

Ladder Capital has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, PennyMac Mortgage Investment Trust has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Ladder Capital and PennyMac Mortgage Investment Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ladder Capital	0	0	2	1	3.33
PennyMac Mortgage Investment Trust	0	5	1	0	2.17

Ladder Capital presently has a consensus target price of $12.75, suggesting a potential upside of 15.63%. PennyMac Mortgage Investment Trust has a consensus target price of $14.00, suggesting a potential upside of 17.89%. Given PennyMac Mortgage Investment Trust’s higher probable upside, analysts clearly believe PennyMac Mortgage Investment Trust is more favorable than Ladder Capital.

Summary

PennyMac Mortgage Investment Trust beats Ladder Capital on 10 of the 17 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 PennyMac Mortgage Investment Trust

PennyMac Mortgage Investment Trust, through its subsidiary, primarily invests in mortgage-related assets in the United States. The company operates through: Credit Sensitive Strategies, Interest Rate Sensitive Strategies, Correspondent Production segments. Its Credit Sensitive Strategies segment invests in credit risk transfer (CRT) agreements, CRT securities, subordinate mortgage-backed securities (MBS), distressed loans, and real estate. The company's Interest Rate Sensitive Strategies segment engages in investing in mortgage servicing rights, excess servicing spreads, and agency and senior non-agency MBS, as well as related interest rate hedging activities. Its Correspondent Production segment is involved in purchasing, pooling, and reselling newly originated prime credit residential loans directly or in the form of MBS. The company primarily sells its loans to government-sponsored entities or PennyMac Loan Services, LLC. 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 shareholders. The company was incorporated in 2009 and is headquartered in Westlake Village, California.