Why the Outlook for ADAM Stock Is Bullish
U.S. real estate has shifted to a buyer’s market, with more sellers than buyers. And, with 30-year average mortgage rates hovering near 6.2%, it continues to be a great time for lenders. Even with interest rates, (which impact mortgage rates) coming down, the move is expected to be slow and measured, with rates remaining above where they were before the 2020 health crisis.
While most people don’t like higher interest rates, they are good for businesses that loan out money, especially mortgage real estate trusts (mREITs) like Adamas Trust Inc (NASDAQ:ADAM).
And with the current federal funds rate in a range of 3.75% to 4.0%, mREITs are able to borrow capital at far lower interest rates than what the mortgages are actually paying.
New-York-City-based Adamas Trust Inc is an mREIT that acquires, invests in, finances, and manages mortgage-related single-family and multi-family residential assets, which, it believes, deliver better risk-adjusted returns over time. (Source: “Company,” Adamas Trust Inc, last accessed November 13, 2025.)
Adamas Trust’s targeted investments include residential loans, structured multifamily property investments, agency residential mortgage-backed securities (RMBS), non-agency RMBS, commercial mortgage-backed securities (CMBS), and certain other mortgage-, residential-housing-, and credit-related assets and strategic investments in companies from which it may purchase, or may in the future purchase.
By allocation, 39% of the mREIT’s capita is in residential mortgage loans, 35% is in agency RMBS, 19% is in structured multifamily investments & other, and eight percent is in non-Agency RMBS.
Adamas Trust Inc Makes Q3 Earnings Beat
For the third quarter ended September 30, Adamas reported net income of $32.7 million, or $0.36 per share, up from $32.41 million, or $0.36 per share, in the same prior-year period. (Source: “Adamas Trust, Inc. Reports Third Quarter 2025 Results,” Adamas Trust Inc, October 29, 2025.)
It reported earnings available per distribution of $0.24 per share, up from $0.10 per share in the same period last year and above Wall Street expectations for $0.22 per share.
For the nine months ended September 30, net income came in at $59.5 million, or $0.65 per share, a big improvement over a net loss of $61.9 million, or loss of $0.68 per share, in the first nine months of 2024.
During the third quarter, the company:
- Acquired $1.8 billion in agency investments with an average coupon of 5.27%
- Acquired $525.7 million in residential loans with an average gross coupon of 8.81%
- Received $26.4 million in proceeds from redemptions of mezzanine lending investments
- Acquired the outstanding 50% ownership interests in Constructive Loans, LLC that were not previously owned by Adamas Trust.
Commenting on the results, Jason Serrano, the mREIT’s chief executive officer, said, “The third quarter was an active and strategically significant period for Adamas. We marked the Company’s recent rebranding with its highest level of quarterly investment activity since inception, expanding the investment portfolio by $1.8 billion.
“Together, these initiatives drove earnings available for distribution higher for the sixth consecutive quarter, reinforcing our commitment to long-term value creation for our stockholders.”
Dividend Increased by 15% to $0.23/Share
As an mREIT, Adamas Trust Inc has to legally distribute at least 90% of its taxable income to shareholders in the form of dividends. On October 30, the company paid a third-quarter dividend of $0.23 per share, up 15% from the $0.20 per share paid in the same prior-year period. (Source: “Adamas Trust Declares Third Quarter 2025 Common Stock Dividend of $0.23 Per Share, and Preferred Stock Dividends,” Adamas Trust Inc, September 15, 2025.)
This works out to an annual distribution of $0.83 for a forward dividend yield of approximately 12%.
ADAM Stock Thumping S&P 500
Save for the tariff-induced sell-off in April, which caught the entire market off guard, ADAM stock has been on a pretty solid run since November 2024. On September 19, the stock hit a new 52-week high of $7.28 per share. It continues to trade near that level.
As of November 13, ADAM is far outpacing the S&P 500, trading up:
- 9.5% over the last six months
- 27% year to date
- 38% on an annual basis
The good times are expected to continue, with Wall Street analysts providing a 12-month share price target range of $7.83 to $8.25. This points to potential upside of 11% to 17%.
Chart courtesy of StockCharts.com
The Lowdown on Adamas Trust Inc
Adamas Trust Inc is an mREIT that delivers long-term, stable distributions to stockholders by leveraging elements of interest rate and credit risk. Through its diversified investment portfolio, shareholders gain exposure to both single family investments and multifamily lending.
Regardless of where interest rates are, Adamas’ strategy is to target mortgage-related and single-family housing-related assets that have elements of credit risk and interest rate risk. It has noted that it expects to allocate less capital to multi-family investments going forward.
This prudent investment style has helped it generate a reliable, high-yield dividend, which has made it an attractive option for Wall Street. Today, 246 institutions hold 56.94% of all outstanding shares. Three of the biggest holders include BlackRock Inc, The Vanguard Group Inc, and Charles Schwab Investment Management, Inc. (Source: “Adamas Trust, Inc. (ADAM),” Yahoo! Finance, last accessed November 13, 2025.)