Ladder Capital: A High-Yielding REIT Amidst Market Uncertainties
Wednesday, Sep 25, 2024 2:00 pm ET
1min read Ladder Capital (LADR), a New York-based real estate investment trust (REIT) with around $5 billion in assets, has been generating buzz among investors for its hot annualized dividend yield of 7.7%. However, as the commercial real estate sector remains risky, investors should approach this top dividend stock with caution.
Headquartered in New York, Ladder Capital provides loans for commercial real estate projects across 48 states. The REIT's share price has rebounded from a Covid-crisis low, appreciating around 15% since last November. This appreciation, coupled with its sizable dividend, has made Ladder Capital an attractive investment for yield-hungry investors.
However, Ladder Capital's BB credit rating from S&P Global, which is below investment grade, indicates a higher risk profile. Despite this, the company's debt rating was upgraded from BB- in June, suggesting positive momentum. The REIT's next quarterly dividend of 23 cents is scheduled for September 30, but it has experienced some volatility and is still below the pre-pandemic level of 34 cents per share.
Ladder Capital's exposure to the commercial real estate sector presents both opportunities and risks. The company has benefited from a resilient economy, easing interest rates, and a gradual return to office work following Covid-19 lockdowns. However, the commercial real estate sector remains uncertain, and conservative investors should be mindful of this risk.
Ladder Capital is expected to report its third-quarter earnings on October 24, with funds from operations (FFO) estimated at 29 cents per share, a penny less than a year ago. Analysts expect revenue to fall 14% to $68.7 million. The REIT's earnings report may provide valuable insights into its dividend sustainability and future growth prospects.
In conclusion, Ladder Capital's high dividend yield and recent share price appreciation make it an attractive investment for those willing to take on more risk. However, the uncertainty in the commercial real estate market and the REIT's below-investment-grade credit rating should be considered. Investors should closely monitor Ladder Capital's earnings report and market conditions to make informed decisions about their positions in this top dividend stock.
Headquartered in New York, Ladder Capital provides loans for commercial real estate projects across 48 states. The REIT's share price has rebounded from a Covid-crisis low, appreciating around 15% since last November. This appreciation, coupled with its sizable dividend, has made Ladder Capital an attractive investment for yield-hungry investors.
However, Ladder Capital's BB credit rating from S&P Global, which is below investment grade, indicates a higher risk profile. Despite this, the company's debt rating was upgraded from BB- in June, suggesting positive momentum. The REIT's next quarterly dividend of 23 cents is scheduled for September 30, but it has experienced some volatility and is still below the pre-pandemic level of 34 cents per share.
Ladder Capital's exposure to the commercial real estate sector presents both opportunities and risks. The company has benefited from a resilient economy, easing interest rates, and a gradual return to office work following Covid-19 lockdowns. However, the commercial real estate sector remains uncertain, and conservative investors should be mindful of this risk.
Ladder Capital is expected to report its third-quarter earnings on October 24, with funds from operations (FFO) estimated at 29 cents per share, a penny less than a year ago. Analysts expect revenue to fall 14% to $68.7 million. The REIT's earnings report may provide valuable insights into its dividend sustainability and future growth prospects.
In conclusion, Ladder Capital's high dividend yield and recent share price appreciation make it an attractive investment for those willing to take on more risk. However, the uncertainty in the commercial real estate market and the REIT's below-investment-grade credit rating should be considered. Investors should closely monitor Ladder Capital's earnings report and market conditions to make informed decisions about their positions in this top dividend stock.
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