APOLLO COMMERCIAL REAL ESTAT (ARI) Stock Fundamental Analysis
NYSE:ARI - New York Stock Exchange, Inc. - US03762U1051 - REIT - Currency: USD
Overall ARI gets a fundamental rating of 4 out of 10. We evaluated ARI against 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.
In the past year ARI had a positive cash flow from operations.
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 worse Return On Assets (-1.61%) than 76.92% of its industry peers.
ARI has a worse Return On Equity (-7.21%) than 72.31% of its industry peers.
ARI has a Return On Invested Capital of 1.56%. This is amongst the best in the industry. ARI outperforms 81.54% of its industry peers.
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
ARI has a better Operating Margin (17.90%) than 66.15% of its industry peers.
ARI's Operating Margin has declined in the last couple of years.
ARI has a Gross Margin of 37.60%. This is in the better half of the industry: ARI outperforms 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
ARI has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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.
Compared to 1 year ago, ARI has a worse debt to assets ratio.
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's Altman-Z score of 0.04 is fine compared to the rest of the industry. ARI outperforms 63.08% 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's Debt to FCF ratio of 203.98 is on the low side compared to the rest of the industry. ARI is outperformed by 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's Current ratio of 0.34 is fine compared to the rest 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's Quick ratio of 0.34 is fine compared to the rest 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
ARI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 25.77%, which is quite impressive.
The Earnings Per Share has been decreasing by -6.89% on average over the past years.
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
The Earnings Per Share is expected to grow by 8.29% on average over the next years. This is quite good.
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
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
The Price/Earnings ratio is 8.03, which indicates a very decent valuation of ARI.
Compared to the rest of the industry, the Price/Earnings ratio of ARI indicates a somewhat cheap valuation: ARI is cheaper than 78.46% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.35, ARI is valued rather cheaply.
ARI is valuated reasonably with a Price/Forward Earnings ratio of 10.19.
The rest of the industry has a similar Price/Forward Earnings ratio as ARI.
ARI is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.20, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.03 | ||
| Fwd PE | 10.19 |
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.
The rest of the industry has a similar Price/Free Cash Flow ratio as ARI.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 43.46 | ||
| EV/EBITDA | 47.44 |
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.
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
ARI has negative earnings and hence a negative payout ratio. The dividend may be in danger.
DP-146.66%
EPS Next 2Y-14.95%
EPS Next 3Y8.29%
9.8
+0.17 (+1.77%)
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 Cap1.36B
Analysts72
Price Target10.2 (4.08%)
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 | 8.03 | ||
| Fwd PE | 10.19 | ||
| P/S | 1.69 | ||
| P/FCF | 43.46 | ||
| P/OCF | 6.78 | ||
| P/B | 0.73 | ||
| P/tB | 0.73 | ||
| EV/EBITDA | 47.44 |
EPS(TTM)1.22
EY12.45%
EPS(NY)0.96
Fwd EY9.82%
FCF(TTM)0.23
FCFY2.3%
OCF(TTM)1.45
OCFY14.75%
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%