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it’s a commercial mortgage lender structured as a real estate investment trust, long position.
The more loans it writes, the more money it makes. Its weighted average loan-to-value (LTV) ratio is a conservative 67%, which means they have a sizable 33% equity cushion again real estate price declines.
Contrast this with your average homebuyer who has, at most, a 20% equity cushion via his or her down payment. And in most cases, as we saw during the housing crisis, it’s much less! This is A-1 credit quality.
Ladder’s dividend is well covered by profits, too. The firm’s primary asset is the expertise of its senior management team, which averages over 28 years of industry experience. Their interests are well aligned with shareholders, thanks to their significant skin in the game. Insiders own $199 million of equity — about 12% of the firm’s $1.5 billion market cap.