APOLLO COMMERCIAL REAL ESTAT (ARI) Stock Fundamental Analysis
NYSE:ARI - New York Stock Exchange, Inc. - US03762U1051 - REIT - Currency: USD
We assign a fundamental rating of 4 out of 10 to ARI. ARI was compared to 65 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. There are concerns on the financial health of ARI while its profitability can be described as average. ARI has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
ARI had positive earnings in the past year.
In the past year ARI had a positive cash flow from operations.
Of the past 5 years ARI 4 years were profitable.
ARI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ARI has a Return On Assets of -1.61%. This is in the lower half of the industry: ARI underperforms 76.92% of its industry peers.
Looking at the Return On Equity, with a value of -7.21%, ARI is doing worse than 72.31% of the companies in the same industry.
With an excellent Return On Invested Capital value of 1.56%, ARI belongs to the best of the industry, outperforming 81.54% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ARI is in line with the industry average of 1.68%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.61% | ||
| ROE | -7.21% | ||
| ROIC | 1.56% |
ROA(3y)0.48%
ROA(5y)0.78%
ROE(3y)1.75%
ROE(5y)2.86%
ROIC(3y)1.68%
ROIC(5y)2.3%
1.3 Margins
Looking at the Operating Margin, with a value of 17.90%, ARI is in the better half of the industry, outperforming 66.15% of the companies in the same industry.
In the last couple of years the Operating Margin of ARI has declined.
Looking at the Gross Margin, with a value of 37.60%, ARI is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
ARI's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.9% | ||
| PM (TTM) | N/A | ||
| GM | 37.6% |
OM growth 3Y-25.68%
OM growth 5Y-20.21%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-16.09%
GM growth 5Y-11.34%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ARI is destroying value.
Compared to 1 year ago, ARI has less shares outstanding
ARI has less shares outstanding than it did 5 years ago.
The debt/assets ratio for ARI is higher compared to a year ago.
2.2 Solvency
ARI has an Altman-Z score of 0.04. This is a bad value and indicates that ARI is not financially healthy and even has some risk of bankruptcy.
ARI has a Altman-Z score of 0.04. This is in the better half of the industry: ARI outperforms 64.62% of its industry peers.
ARI has a debt to FCF ratio of 203.98. This is a negative value and a sign of low solvency as ARI would need 203.98 years to pay back of all of its debts.
With a Debt to FCF ratio value of 203.98, ARI is not doing good in the industry: 61.54% of the companies in the same industry are doing better.
ARI has a Debt/Equity ratio of 2.87. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 2.87, ARI is in the better half of the industry, outperforming 69.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.87 | ||
| Debt/FCF | 203.98 | ||
| Altman-Z | 0.04 |
ROIC/WACC0.22
WACC7.19%
2.3 Liquidity
ARI has a Current Ratio of 0.34. This is a bad value and indicates that ARI is not financially healthy enough and could expect problems in meeting its short term obligations.
ARI has a Current ratio of 0.34. This is in the better half of the industry: ARI outperforms 67.69% of its industry peers.
ARI has a Quick Ratio of 0.34. This is a bad value and indicates that ARI is not financially healthy enough and could expect problems in meeting its short term obligations.
ARI has a Quick ratio of 0.34. This is in the better half of the industry: ARI outperforms 67.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.34 | ||
| Quick Ratio | 0.34 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 25.77% over the past year.
Measured over the past years, ARI shows a decrease in Earnings Per Share. The EPS has been decreasing by -6.89% on average per year.
ARI shows a decrease in Revenue. In the last year, the revenue decreased by -0.38%.
ARI shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.63% yearly.
EPS 1Y (TTM)25.77%
EPS 3Y0%
EPS 5Y-6.89%
EPS Q2Q%-31.43%
Revenue 1Y (TTM)-0.38%
Revenue growth 3Y21.79%
Revenue growth 5Y10.63%
Sales Q2Q%-30.33%
3.2 Future
Based on estimates for the next years, ARI will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.29% on average per year.
Based on estimates for the next years, ARI will show a small growth in Revenue. The Revenue will grow by 5.98% on average per year.
EPS Next Y-34.08%
EPS Next 2Y-14.95%
EPS Next 3Y8.29%
EPS Next 5YN/A
Revenue Next Year-5.94%
Revenue Next 2Y5.98%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
ARI is valuated reasonably with a Price/Earnings ratio of 8.07.
Based on the Price/Earnings ratio, ARI is valued a bit cheaper than the industry average as 78.46% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.17, ARI is valued rather cheaply.
With a Price/Forward Earnings ratio of 10.23, the valuation of ARI can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ARI is on the same level as its industry peers.
ARI is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.10, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.07 | ||
| Fwd PE | 10.23 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARI is valued cheaper than 87.69% of the companies in the same industry.
ARI's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 43.64 | ||
| EV/EBITDA | 47.63 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-14.95%
EPS Next 3Y8.29%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 10.48%, ARI is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 14.38, ARI's dividend is way lower than its industry peers. On top of this 87.69% of the companies listed in the same industry pay a better dividend than ARI!
Compared to an average S&P500 Dividend Yield of 2.40, ARI pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.48% |
5.2 History
The dividend of ARI decreases each year by -6.89%.
ARI has paid a dividend for at least 10 years, which is a reliable track record.
ARI has decreased its dividend in the last 3 years.
Dividend Growth(5Y)-6.89%
Div Incr Years0
Div Non Decr Years2
5.3 Sustainability
The earnings of ARI are negative and hence is the payout ratio. ARI will probably not be able to sustain this dividend level.
DP-146.66%
EPS Next 2Y-14.95%
EPS Next 3Y8.29%
9.84
+0.04 (+0.41%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners66.38%
Inst Owner Change2.86%
Ins Owners0.68%
Ins Owner Change-4.52%
Market Cap1.37B
Analysts72
Price Target10.2 (3.66%)
Short Float %2.1%
Short Ratio2.23
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.48% |
Yearly Dividend1.42
Dividend Growth(5Y)-6.89%
DP-146.66%
Div Incr Years0
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)29.68%
Min EPS beat(2)19.58%
Max EPS beat(2)39.78%
EPS beat(4)4
Avg EPS beat(4)21.74%
Min EPS beat(4)13.62%
Max EPS beat(4)39.78%
EPS beat(8)7
Avg EPS beat(8)-2.1%
EPS beat(12)10
Avg EPS beat(12)-0.87%
EPS beat(16)11
Avg EPS beat(16)-1.8%
Revenue beat(2)0
Avg Revenue beat(2)-7.6%
Min Revenue beat(2)-8.49%
Max Revenue beat(2)-6.72%
Revenue beat(4)0
Avg Revenue beat(4)-7.96%
Min Revenue beat(4)-12.63%
Max Revenue beat(4)-3.99%
Revenue beat(8)0
Avg Revenue beat(8)-8.45%
Revenue beat(12)4
Avg Revenue beat(12)28.37%
Revenue beat(16)8
Avg Revenue beat(16)37.56%
PT rev (1m)1.27%
PT rev (3m)7.14%
EPS NQ rev (1m)-2.16%
EPS NQ rev (3m)-7.15%
EPS NY rev (1m)4.37%
EPS NY rev (3m)4.08%
Revenue NQ rev (1m)6.05%
Revenue NQ rev (3m)1.68%
Revenue NY rev (1m)-3.09%
Revenue NY rev (3m)-5.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.07 | ||
| Fwd PE | 10.23 | ||
| P/S | 1.69 | ||
| P/FCF | 43.64 | ||
| P/OCF | 6.81 | ||
| P/B | 0.73 | ||
| P/tB | 0.73 | ||
| EV/EBITDA | 47.63 |
EPS(TTM)1.22
EY12.4%
EPS(NY)0.96
Fwd EY9.78%
FCF(TTM)0.23
FCFY2.29%
OCF(TTM)1.45
OCFY14.69%
SpS5.81
BVpS13.49
TBVpS13.49
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.61% | ||
| ROE | -7.21% | ||
| ROCE | 1.97% | ||
| ROIC | 1.56% | ||
| ROICexc | 1.63% | ||
| ROICexgc | 1.65% | ||
| OM | 17.9% | ||
| PM (TTM) | N/A | ||
| GM | 37.6% | ||
| FCFM | 3.88% |
ROA(3y)0.48%
ROA(5y)0.78%
ROE(3y)1.75%
ROE(5y)2.86%
ROIC(3y)1.68%
ROIC(5y)2.3%
ROICexc(3y)1.74%
ROICexc(5y)2.43%
ROICexgc(3y)1.75%
ROICexgc(5y)2.45%
ROCE(3y)2.13%
ROCE(5y)2.91%
ROICexcg growth 3Y-15.06%
ROICexcg growth 5Y-22.32%
ROICexc growth 3Y-15.31%
ROICexc growth 5Y-22.29%
OM growth 3Y-25.68%
OM growth 5Y-20.21%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-16.09%
GM growth 5Y-11.34%
F-Score6
Asset Turnover0.1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.87 | ||
| Debt/FCF | 203.98 | ||
| Debt/EBITDA | 34.48 | ||
| Cap/Depr | 1452.74% | ||
| Cap/Sales | 20.99% | ||
| Interest Coverage | 0.29 | ||
| Cash Conversion | 128.56% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.34 | ||
| Quick Ratio | 0.34 | ||
| Altman-Z | 0.04 |
F-Score6
WACC7.19%
ROIC/WACC0.22
Cap/Depr(3y)2341.93%
Cap/Depr(5y)N/A
Cap/Sales(3y)11.9%
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)25.77%
EPS 3Y0%
EPS 5Y-6.89%
EPS Q2Q%-31.43%
EPS Next Y-34.08%
EPS Next 2Y-14.95%
EPS Next 3Y8.29%
EPS Next 5YN/A
Revenue 1Y (TTM)-0.38%
Revenue growth 3Y21.79%
Revenue growth 5Y10.63%
Sales Q2Q%-30.33%
Revenue Next Year-5.94%
Revenue Next 2Y5.98%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-24.5%
EBIT growth 3Y-9.49%
EBIT growth 5Y-11.73%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-84.82%
FCF growth 3Y-46.03%
FCF growth 5Y-35.16%
OCF growth 1Y-28.01%
OCF growth 3Y0.24%
OCF growth 5Y-5.98%