APOLLO COMMERCIAL REAL ESTAT (ARI) Stock Fundamental Analysis
NYSE:ARI - New York Stock Exchange, Inc. - US03762U1051 - REIT - Currency: USD
ARI gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 66 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 decent growth rate and is not valued too expensively.
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.
Each year in the past 5 years ARI had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of -0.05%, ARI is doing worse than 65.15% of the companies in the same industry.
ARI has a worse Return On Equity (-0.23%) than 65.15% of its industry peers.
ARI has a better Return On Invested Capital (1.41%) than 81.82% 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 1.42%.
| 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's Operating Margin of 17.24% is fine compared to the rest of the industry. ARI outperforms 75.76% of its industry peers.
ARI's Operating Margin has declined in the last couple of years.
ARI has a better Gross Margin (37.52%) than 78.79% 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ARI is destroying value.
Compared to 1 year ago, ARI has less shares outstanding
Compared to 5 years ago, ARI has less shares outstanding
Compared to 1 year ago, ARI has a worse debt to assets ratio.
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 of -0.03. This is comparable to the rest of the industry: ARI outperforms 57.58% of its industry peers.
ARI has a debt to FCF ratio of 225.23. This is a negative value and a sign of low solvency as ARI would need 225.23 years to pay back of 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 63.64% of its industry peers.
ARI has a Debt/Equity ratio of 2.99. This is a high value indicating a heavy dependency on external financing.
ARI has a Debt to Equity ratio of 2.99. This is in the better half of the industry: ARI outperforms 69.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.99 | ||
| Debt/FCF | 225.23 | ||
| Altman-Z | -0.03 |
ROIC/WACC0.2
WACC7.2%
2.3 Liquidity
A Current Ratio of 0.17 indicates that ARI may have some problems paying its short term obligations.
The Current ratio of ARI (0.17) is comparable to the rest of the industry.
A Quick Ratio of 0.17 indicates that ARI may have some problems paying its short term obligations.
ARI's Quick ratio of 0.17 is in line compared to the rest of the industry. ARI outperforms 48.48% of its industry peers.
| 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%.
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)-6.9%
Revenue growth 3Y21.79%
Revenue growth 5Y10.63%
Sales Q2Q%-30.33%
3.2 Future
ARI is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.29% yearly.
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.
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
A Price/Earnings ratio of 8.09 indicates a reasonable valuation of ARI.
Based on the Price/Earnings ratio, ARI is valued cheaper than 80.30% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.30. ARI is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 10.26, which indicates a very decent valuation of ARI.
ARI's Price/Forward Earnings ratio is in line with the industry average.
ARI is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.09 | ||
| Fwd PE | 10.26 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARI indicates a rather cheap valuation: ARI is cheaper than 86.36% of the companies listed in the same industry.
ARI's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 45.32 | ||
| EV/EBITDA | 56.4 |
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 10.14%, ARI is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 11.50, ARI has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.37, ARI pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.14% |
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%
9.87
+0.06 (+0.61%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners67.69%
Inst Owner Change0%
Ins Owners0.67%
Ins Owner Change-8.94%
Market Cap1.37B
Analysts72
Price Target10.46 (5.98%)
Short Float %2.17%
Short Ratio2.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.14% |
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)4.24%
EPS NQ rev (1m)0%
EPS NQ rev (3m)15.35%
EPS NY rev (1m)0%
EPS NY rev (3m)2.12%
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 | 8.09 | ||
| Fwd PE | 10.26 | ||
| P/S | 1.78 | ||
| P/FCF | 45.32 | ||
| P/OCF | 7.34 | ||
| P/B | 0.74 | ||
| P/tB | 0.74 | ||
| EV/EBITDA | 56.4 |
EPS(TTM)1.22
EY12.36%
EPS(NY)0.96
Fwd EY9.75%
FCF(TTM)0.22
FCFY2.21%
OCF(TTM)1.34
OCFY13.62%
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
WACC7.2%
ROIC/WACC0.2
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%