APOLLO COMMERCIAL REAL ESTAT (ARI) Stock Fundamental Analysis
NYSE:ARI - New York Stock Exchange, Inc. - US03762U1051 - REIT - Currency: USD
Taking everything into account, ARI scores 4 out of 10 in our fundamental rating. 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 has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year ARI was profitable.
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
The Return On Assets of ARI (-0.05%) is worse than 64.62% of its industry peers.
ARI's Return On Equity of -0.23% is on the low side compared to the rest of the industry. ARI is outperformed by 64.62% of its industry peers.
With an excellent Return On Invested Capital value of 1.41%, ARI belongs to the best of the industry, outperforming 83.08% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ARI is in line with the industry average of 1.42%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.05% | ||
| ROE | -0.23% | ||
| ROIC | 1.41% |
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 Operating Margin of 17.24%. This is in the better half of the industry: ARI outperforms 76.92% of its industry peers.
ARI's Operating Margin has declined in the last couple of years.
ARI's Gross Margin of 37.52% is fine compared to the rest of the industry. ARI outperforms 80.00% of its industry peers.
In the last couple of years the Gross Margin of ARI has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.24% | ||
| PM (TTM) | N/A | ||
| GM | 37.52% |
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
The number of shares outstanding for ARI has been reduced compared to 5 years ago.
ARI has a worse debt/assets ratio than last year.
2.2 Solvency
ARI has an Altman-Z score of -0.03. 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 (-0.03) which is in line with its industry peers.
The Debt to FCF ratio of ARI is 225.23, which is on the high side as it means it would take ARI, 225.23 years of fcf income to pay off all of its debts.
ARI has a Debt to FCF ratio of 225.23. This is in the lower half of the industry: ARI underperforms 63.08% of its industry peers.
A Debt/Equity ratio of 2.99 is on the high side and indicates that ARI has dependencies on debt financing.
With a decent Debt to Equity ratio value of 2.99, ARI is doing good in the industry, outperforming 69.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.99 | ||
| Debt/FCF | 225.23 | ||
| Altman-Z | -0.03 |
ROIC/WACC0.19
WACC7.58%
2.3 Liquidity
ARI has a Current Ratio of 0.17. 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 (0.17) which is in line with its industry peers.
ARI has a Quick Ratio of 0.17. This is a bad value and indicates that ARI is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of ARI (0.17) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.17 | ||
| Quick Ratio | 0.17 |
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.
ARI shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -6.89% yearly.
ARI shows a decrease in Revenue. In the last year, the revenue decreased by -6.90%.
Measured over the past years, ARI shows a quite strong growth in Revenue. The Revenue has been growing by 10.63% on average per year.
EPS 1Y (TTM)25.77%
EPS 3Y0%
EPS 5Y-6.89%
EPS Q2Q%-31.43%
Revenue 1Y (TTM)-6.9%
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.
The Revenue is expected to grow by 5.98% on average over the next years.
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
With a Price/Earnings ratio of 8.03, the valuation of ARI can be described as very reasonable.
ARI's Price/Earnings ratio is a bit cheaper when compared to the industry. ARI is cheaper than 80.00% of the companies in the same industry.
When comparing the Price/Earnings ratio of ARI to the average of the S&P500 Index (26.34), we can say ARI is valued rather cheaply.
A Price/Forward Earnings ratio of 10.19 indicates a reasonable valuation of ARI.
The rest of the industry has a similar Price/Forward Earnings ratio as ARI.
The average S&P500 Price/Forward Earnings ratio is at 22.19. ARI is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.03 | ||
| Fwd PE | 10.19 |
4.2 Price Multiples
ARI's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ARI is cheaper than 86.15% of the companies in the same industry.
ARI's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 45 | ||
| EV/EBITDA | 56.33 |
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 10.02%, ARI is a good candidate for dividend investing.
ARI's Dividend Yield is slightly below the industry average, which is at 12.22.
Compared to an average S&P500 Dividend Yield of 2.40, ARI pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.02% |
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.
Dividend Growth(5Y)-6.89%
Div Incr Years0
Div Non Decr Years0
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-4231.44%
EPS Next 2Y-14.95%
EPS Next 3Y8.29%
9.8
+0.09 (+0.93%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners67.69%
Inst Owner Change2.85%
Ins Owners0.67%
Ins Owner Change-4.52%
Market Cap1.36B
Analysts72
Price Target10.46 (6.73%)
Short Float %2.16%
Short Ratio2.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.02% |
Yearly Dividend1.42
Dividend Growth(5Y)-6.89%
DP-4231.44%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)25.93%
Min EPS beat(2)12.09%
Max EPS beat(2)39.78%
EPS beat(4)4
Avg EPS beat(4)21.27%
Min EPS beat(4)12.09%
Max EPS beat(4)39.78%
EPS beat(8)7
Avg EPS beat(8)-2.44%
EPS beat(12)10
Avg EPS beat(12)-0.32%
EPS beat(16)11
Avg EPS beat(16)-1.9%
Revenue beat(2)0
Avg Revenue beat(2)-14.63%
Min Revenue beat(2)-20.78%
Max Revenue beat(2)-8.49%
Revenue beat(4)0
Avg Revenue beat(4)-12.15%
Min Revenue beat(4)-20.78%
Max Revenue beat(4)-6.72%
Revenue beat(8)0
Avg Revenue beat(8)-9.71%
Revenue beat(12)3
Avg Revenue beat(12)21.38%
Revenue beat(16)7
Avg Revenue beat(16)32.51%
PT rev (1m)2.5%
PT rev (3m)6.03%
EPS NQ rev (1m)0%
EPS NQ rev (3m)15.35%
EPS NY rev (1m)0%
EPS NY rev (3m)4.08%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.47%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.03 | ||
| Fwd PE | 10.19 | ||
| P/S | 1.77 | ||
| P/FCF | 45 | ||
| P/OCF | 7.29 | ||
| P/B | 0.73 | ||
| P/tB | 0.73 | ||
| EV/EBITDA | 56.33 |
EPS(TTM)1.22
EY12.45%
EPS(NY)0.96
Fwd EY9.82%
FCF(TTM)0.22
FCFY2.22%
OCF(TTM)1.34
OCFY13.71%
SpS5.54
BVpS13.39
TBVpS13.39
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.05% | ||
| ROE | -0.23% | ||
| ROCE | 1.78% | ||
| ROIC | 1.41% | ||
| ROICexc | 1.44% | ||
| ROICexgc | 1.45% | ||
| OM | 17.24% | ||
| PM (TTM) | N/A | ||
| GM | 37.52% | ||
| FCFM | 3.93% |
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-Score4
Asset Turnover0.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.99 | ||
| Debt/FCF | 225.23 | ||
| Debt/EBITDA | 39.18 | ||
| Cap/Depr | 1652.64% | ||
| Cap/Sales | 20.32% | ||
| Interest Coverage | 0.28 | ||
| Cash Conversion | 131.31% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.17 | ||
| Quick Ratio | 0.17 | ||
| Altman-Z | -0.03 |
F-Score4
WACC7.58%
ROIC/WACC0.19
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)-6.9%
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-27.34%
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-89.38%
FCF growth 3Y-46.03%
FCF growth 5Y-35.16%
OCF growth 1Y-43.78%
OCF growth 3Y0.24%
OCF growth 5Y-5.98%