APOLLO COMMERCIAL REAL ESTAT (ARI) Stock Fundamental Analysis
USA - NYSE:ARI - US03762U1051 - REIT
10.17 USD
+0.02 (+0.2%)
10.1744 USD
+0 (+0.04%)
We assign a fundamental rating of 4 out of 10 to ARI. ARI was compared to 66 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. ARI has a medium profitability rating, but doesn't score so well on its financial health evaluation. ARI has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year ARI was profitable.
In the past year ARI had a positive cash flow from operations.
ARI had positive earnings in 4 of the past 5 years.
Each year in the past 5 years ARI had a positive operating cash flow.
1.2 Ratios
ARI has a worse Return On Assets (-0.19%) than 65.15% of its industry peers.
With a Return On Equity value of -1.03%, ARI is not doing good in the industry: 65.15% of the companies in the same industry are doing better.
Looking at the Return On Invested Capital, with a value of 1.26%, ARI belongs to the top of the industry, outperforming 81.82% 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 1.28%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.19% | ||
| ROE | -1.03% | ||
| ROIC | 1.26% |
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 16.50%, ARI is in the better half of the industry, outperforming 78.79% of the companies in the same industry.
ARI's Operating Margin has declined in the last couple of years.
ARI's Gross Margin of 36.89% is amongst the best of the industry. ARI outperforms 81.82% of its industry peers.
In the last couple of years the Gross Margin of ARI has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.5% | ||
| PM (TTM) | N/A | ||
| GM | 36.89% |
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.
ARI has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, ARI has less shares outstanding
ARI has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of -0.11, we must say that ARI is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of -0.11, ARI is in line with its industry, outperforming 50.00% of the companies in the same industry.
ARI has a debt to FCF ratio of 152.71. This is a negative value and a sign of low solvency as ARI would need 152.71 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 152.71, ARI is in line with its industry, outperforming 42.42% of the companies in the same industry.
ARI has a Debt/Equity ratio of 3.21. This is a high value indicating a heavy dependency on external financing.
With a decent Debt to Equity ratio value of 3.21, ARI is doing good in the industry, outperforming 71.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.21 | ||
| Debt/FCF | 152.71 | ||
| Altman-Z | -0.11 |
ROIC/WACC0.18
WACC7.03%
2.3 Liquidity
A Current Ratio of 0.13 indicates that ARI may have some problems paying its short term obligations.
ARI has a Current ratio (0.13) which is comparable to the rest of the industry.
ARI has a Quick Ratio of 0.13. 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 (0.13) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.13 | ||
| Quick Ratio | 0.13 |
3. Growth
3.1 Past
ARI shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -20.98%.
ARI shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -6.89% yearly.
The Revenue has decreased by -8.78% in the past 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)-20.98%
EPS 3Y0%
EPS 5Y-6.89%
EPS Q2Q%-25.71%
Revenue 1Y (TTM)-8.78%
Revenue growth 3Y21.79%
Revenue growth 5Y10.63%
Sales Q2Q%-16.79%
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 3.05% yearly.
EPS Next Y-29.98%
EPS Next 2Y-13.18%
EPS Next 3Y8.29%
EPS Next 5YN/A
Revenue Next Year-10.24%
Revenue Next 2Y3.05%
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.
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
Based on the Price/Earnings ratio of 9.00, the valuation of ARI can be described as reasonable.
72.73% of the companies in the same industry are more expensive than ARI, based on the Price/Earnings ratio.
ARI is valuated cheaply when we compare the Price/Earnings ratio to 27.77, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 10.15, 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.
When comparing the Price/Forward Earnings ratio of ARI to the average of the S&P500 Index (23.23), we can say ARI is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9 | ||
| Fwd PE | 10.15 |
4.2 Price Multiples
81.82% 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 is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.61 | ||
| EV/EBITDA | 67.35 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-13.18%
EPS Next 3Y8.29%
5. Dividend
5.1 Amount
ARI has a Yearly Dividend Yield of 10.12%, which is a nice return.
ARI's Dividend Yield is slightly below the industry average, which is at 13.07.
Compared to an average S&P500 Dividend Yield of 2.36, ARI pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.12% |
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.
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-879.4%
EPS Next 2Y-13.18%
EPS Next 3Y8.29%
10.17
+0.02 (+0.2%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners67.64%
Inst Owner Change-24%
Ins Owners0.6%
Ins Owner Change-9.67%
Market Cap1.41B
Analysts72
Price Target10.65 (4.72%)
Short Float %2.58%
Short Ratio4.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.12% |
Yearly Dividend1.42
Dividend Growth(5Y)-6.89%
DP-879.4%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.37%
Min EPS beat(2)4.64%
Max EPS beat(2)12.09%
EPS beat(4)4
Avg EPS beat(4)19.02%
Min EPS beat(4)4.64%
Max EPS beat(4)39.78%
EPS beat(8)8
Avg EPS beat(8)14.21%
EPS beat(12)10
Avg EPS beat(12)-0.49%
EPS beat(16)12
Avg EPS beat(16)0.01%
Revenue beat(2)0
Avg Revenue beat(2)-14.96%
Min Revenue beat(2)-20.78%
Max Revenue beat(2)-9.14%
Revenue beat(4)0
Avg Revenue beat(4)-11.28%
Min Revenue beat(4)-20.78%
Max Revenue beat(4)-6.72%
Revenue beat(8)0
Avg Revenue beat(8)-10.29%
Revenue beat(12)2
Avg Revenue beat(12)12.33%
Revenue beat(16)6
Avg Revenue beat(16)27.87%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)-2.7%
EPS NQ rev (3m)12.5%
EPS NY rev (1m)2.67%
EPS NY rev (3m)6.22%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.6%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-4.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9 | ||
| Fwd PE | 10.15 | ||
| P/S | 1.87 | ||
| P/FCF | 27.61 | ||
| P/OCF | 7.08 | ||
| P/B | 0.77 | ||
| P/tB | 0.77 | ||
| EV/EBITDA | 67.35 |
EPS(TTM)1.13
EY11.11%
EPS(NY)1
Fwd EY9.86%
FCF(TTM)0.37
FCFY3.62%
OCF(TTM)1.44
OCFY14.13%
SpS5.44
BVpS13.29
TBVpS13.29
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.19% | ||
| ROE | -1.03% | ||
| ROCE | 1.59% | ||
| ROIC | 1.26% | ||
| ROICexc | 1.29% | ||
| ROICexgc | 1.3% | ||
| OM | 16.5% | ||
| PM (TTM) | N/A | ||
| GM | 36.89% | ||
| FCFM | 6.77% |
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 Turnover0.08
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.21 | ||
| Debt/FCF | 152.71 | ||
| Debt/EBITDA | 44.1 | ||
| Cap/Depr | 1529.33% | ||
| Cap/Sales | 19.66% | ||
| Interest Coverage | 0.27 | ||
| Cash Conversion | 148.6% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.13 | ||
| Quick Ratio | 0.13 | ||
| Altman-Z | -0.11 |
F-Score4
WACC7.03%
ROIC/WACC0.18
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)-20.98%
EPS 3Y0%
EPS 5Y-6.89%
EPS Q2Q%-25.71%
EPS Next Y-29.98%
EPS Next 2Y-13.18%
EPS Next 3Y8.29%
EPS Next 5YN/A
Revenue 1Y (TTM)-8.78%
Revenue growth 3Y21.79%
Revenue growth 5Y10.63%
Sales Q2Q%-16.79%
Revenue Next Year-10.24%
Revenue Next 2Y3.05%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-26.63%
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-81.03%
FCF growth 3Y-46.03%
FCF growth 5Y-35.16%
OCF growth 1Y-39.88%
OCF growth 3Y0.24%
OCF growth 5Y-5.98%