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. While ARI is still in line with the averages on profitability rating, there are concerns on its financial health. ARI is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
ARI had positive earnings in the past year.
ARI had a positive operating cash flow in the past year.
Of the past 5 years ARI 4 years were profitable.
In the past 5 years ARI always reported a positive cash flow from operatings.
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.
ARI has a Return On Equity of -7.21%. This is in the lower half of the industry: ARI underperforms 72.31% of its industry peers.
ARI's Return On Invested Capital of 1.56% is amongst the best of the industry. ARI outperforms 81.54% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital 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
With a decent Operating Margin value of 17.90%, ARI is doing good in 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.
ARI has a better Gross Margin (37.60%) than 80.00% of its industry peers.
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ARI is destroying value.
The number of shares outstanding for ARI has been reduced compared to 1 year ago.
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
Based on the Altman-Z score of 0.04, we must say that ARI is in the distress zone and 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.
ARI has a worse Debt to FCF ratio (203.98) than 61.54% of its industry peers.
ARI has a Debt/Equity ratio of 2.87. This is a high value indicating a heavy dependency on external financing.
ARI has a Debt to Equity ratio of 2.87. This is in the better half of the industry: ARI outperforms 69.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.87 | ||
| Debt/FCF | 203.98 | ||
| Altman-Z | 0.04 |
ROIC/WACC0.22
WACC7.2%
2.3 Liquidity
A Current Ratio of 0.34 indicates that ARI may have some problems paying its short term obligations.
ARI has a better Current ratio (0.34) than 67.69% of its industry peers.
A Quick Ratio of 0.34 indicates that ARI may have some problems paying 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.
ARI shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -6.89% yearly.
Looking at the last year, ARI shows a decrease in Revenue. The Revenue has decreased by -0.38% in the last year.
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.
ARI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.98% yearly.
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
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 8.11, the valuation of ARI can be described as reasonable.
ARI's Price/Earnings ratio is a bit cheaper when compared to the industry. ARI is cheaper than 78.46% of the companies in the same industry.
When comparing the Price/Earnings ratio of ARI to the average of the S&P500 Index (26.20), we can say ARI is valued rather cheaply.
With a Price/Forward Earnings ratio of 10.29, 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's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.11 | ||
| Fwd PE | 10.29 |
4.2 Price Multiples
87.69% of the companies in the same industry are more expensive than ARI, based on the Enterprise Value to EBITDA ratio.
ARI's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 43.91 | ||
| 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
ARI has a Yearly Dividend Yield of 10.48%, which is a nice return.
With a Dividend Yield of 10.48, ARI pays less dividend than the industry average, which is at 14.38. 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 been paying a dividend for at least 10 years, so it has 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%
9.9
+0.06 (+0.61%)
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 Cap1.38B
Analysts72
Price Target10.2 (3.03%)
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 | 8.11 | ||
| Fwd PE | 10.29 | ||
| P/S | 1.7 | ||
| P/FCF | 43.91 | ||
| P/OCF | 6.85 | ||
| P/B | 0.73 | ||
| P/tB | 0.73 | ||
| EV/EBITDA | 47.63 |
EPS(TTM)1.22
EY12.32%
EPS(NY)0.96
Fwd EY9.72%
FCF(TTM)0.23
FCFY2.28%
OCF(TTM)1.45
OCFY14.6%
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
WACC7.2%
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%