Ladder Capital (NYSE:LADR) and Chicago Atlantic Real Estate Finance (NASDAQ:REFI) Financial Analysis

Ladder Capital (NYSE:LADR) and Chicago Atlantic Real Estate Finance (NASDAQ:REFI) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, profitability, risk, earnings and dividends.

Valuation and Earnings

This table compares Ladder Capital and Chicago Atlantic Real Estate Finance”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ladder Capital	$213.44 million	5.53	$64.18 million	$0.80	11.64
Chicago Atlantic Real Estate Finance	$55.39 million	4.33	$36.01 million	$1.37	6.84

Ladder Capital has higher revenue and earnings than Chicago Atlantic Real Estate Finance. Chicago Atlantic Real Estate Finance is trading at a lower price-to-earnings ratio than Ladder Capital, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ladder Capital and Chicago Atlantic Real Estate Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ladder Capital	23.70%	6.99%	1.86%
Chicago Atlantic Real Estate Finance	54.57%	11.53%	8.06%

Risk and Volatility

Ladder Capital has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500. Comparatively, Chicago Atlantic Real Estate Finance has a beta of 0.26, indicating that its stock price is 74% less volatile than the S&P 500.

Dividends

Ladder Capital pays an annual dividend of $0.92 per share and has a dividend yield of 9.9%. Chicago Atlantic Real Estate Finance pays an annual dividend of $1.88 per share and has a dividend yield of 20.1%. Ladder Capital pays out 115.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chicago Atlantic Real Estate Finance pays out 137.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chicago Atlantic Real Estate Finance has raised its dividend for 1 consecutive years. Chicago Atlantic Real Estate Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and price targets for Ladder Capital and Chicago Atlantic Real Estate Finance, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ladder Capital	1	2	4	0	2.43
Chicago Atlantic Real Estate Finance	1	2	2	0	2.20

Ladder Capital currently has a consensus target price of $12.29, suggesting a potential upside of 31.96%. Chicago Atlantic Real Estate Finance has a consensus target price of $15.33, suggesting a potential upside of 63.64%. Given Chicago Atlantic Real Estate Finance’s higher possible upside, analysts plainly believe Chicago Atlantic Real Estate Finance is more favorable than Ladder Capital.

Insider & Institutional Ownership

62.3% of Ladder Capital shares are owned by institutional investors. Comparatively, 25.5% of Chicago Atlantic Real Estate Finance shares are owned by institutional investors. 12.6% of Ladder Capital shares are owned by insiders. Comparatively, 6.5% of Chicago Atlantic Real Estate Finance shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Ladder Capital beats Chicago Atlantic Real Estate Finance 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 Chicago Atlantic Real Estate Finance

Chicago Atlantic Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. The company engages in originating, structuring, and investing in first mortgage loans and alternative structured financings secured by commercial real estate properties. Its portfolio primarily includes offers senior loans to state-licensed operators in the cannabis industry. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Chicago Atlantic Real Estate Finance, Inc. was incorporated in 2021 and is headquartered in Chicago, Illinois.