APOLLO COMMERCIAL REAL ESTAT (ARI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARI - US03762U1051 - REIT
10.02 USD
+0.1 (+1.01%)
10.02 USD
0 (0%)
Overall ARI gets a fundamental rating of 5 out of 10. We evaluated ARI against 68 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. Both the profitability and the financial health of ARI get a neutral evaluation. Nothing too spectacular is happening here. ARI is valued correctly, but it does not seem to be growing.
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.
- ARI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 1.29%, ARI belongs to the top of the industry, outperforming 89.71% of the companies in the same industry.
- With an excellent Return On Equity value of 6.61%, ARI belongs to the best of the industry, outperforming 88.24% of the companies in the same industry.
- The Return On Invested Capital of ARI (1.06%) is better than 83.82% 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 1.28%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.29% | ||
| ROE | 6.61% | ||
| ROIC | 1.06% |
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
- The Profit Margin of ARI (16.94%) is better than 72.06% of its industry peers.
- ARI's Operating Margin of 15.93% is in line compared to the rest of the industry. ARI outperforms 57.35% of its industry peers.
- ARI's Operating Margin has declined in the last couple of years.
- ARI has a better Gross Margin (36.98%) than 76.47% of its industry peers.
- ARI's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.93% | ||
| PM (TTM) | 16.94% | ||
| GM | 36.98% |
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
- The number of shares outstanding for ARI has been reduced compared to 5 years ago.
- Compared to 1 year ago, ARI has a worse debt to assets ratio.
2.2 Solvency
- Based on the Altman-Z score of 0.03, we must say that ARI is in the distress zone and has some risk of bankruptcy.
- ARI has a better Altman-Z score (0.03) than 64.71% of its industry peers.
- ARI has a debt to FCF ratio of 134.05. This is a negative value and a sign of low solvency as ARI would need 134.05 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 134.05, ARI is in the better half of the industry, outperforming 63.24% of the companies in the same industry.
- A Debt/Equity ratio of 3.61 is on the high side and indicates that ARI has dependencies on debt financing.
- The Debt to Equity ratio of ARI (3.61) is better than 63.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.61 | ||
| Debt/FCF | 134.05 | ||
| Altman-Z | 0.03 |
ROIC/WACC0.15
WACC7.04%
2.3 Liquidity
- A Current Ratio of 0.35 indicates that ARI may have some problems paying its short term obligations.
- The Current ratio of ARI (0.35) is better than 61.76% of its industry peers.
- A Quick Ratio of 0.35 indicates that ARI may have some problems paying its short term obligations.
- ARI's Quick ratio of 0.35 is fine compared to the rest of the industry. ARI outperforms 61.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.35 | ||
| Quick Ratio | 0.35 |
3. Growth
3.1 Past
- ARI shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -18.25%.
- Measured over the past years, ARI shows a decrease in Earnings Per Share. The EPS has been decreasing by -6.89% on average per year.
- Looking at the last year, ARI shows a very negative growth in Revenue. The Revenue has decreased by -12.52% 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)-18.25%
EPS 3Y0%
EPS 5Y-6.89%
EPS Q2Q%-3.23%
Revenue 1Y (TTM)-12.52%
Revenue growth 3Y21.79%
Revenue growth 5Y10.63%
Sales Q2Q%-14.9%
3.2 Future
- ARI is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -3.59% yearly.
- The Revenue is expected to grow by 3.65% on average over the next years.
EPS Next Y-25.28%
EPS Next 2Y-13.64%
EPS Next 3Y-3.59%
EPS Next 5YN/A
Revenue Next Year-12.1%
Revenue Next 2Y1.11%
Revenue Next 3Y3.65%
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 8.95, the valuation of ARI can be described as very reasonable.
- Compared to the rest of the industry, the Price/Earnings ratio of ARI indicates a somewhat cheap valuation: ARI is cheaper than 76.47% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.25, ARI is valued rather cheaply.
- The Price/Forward Earnings ratio is 10.10, which indicates a very decent valuation of ARI.
- ARI's Price/Forward Earnings ratio is in line with the industry average.
- ARI's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.95 | ||
| Fwd PE | 10.1 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARI indicates a somewhat cheap valuation: ARI is cheaper than 77.94% of the companies listed in the same industry.
- ARI's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.8 | ||
| EV/EBITDA | 68.74 |
4.3 Compensation for Growth
- ARI has a very decent profitability rating, which may justify a higher PE ratio.
- ARI's earnings are expected to decrease with -3.59% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-13.64%
EPS Next 3Y-3.59%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 10.01%, ARI is a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 11.26, ARI is paying slightly less dividend.
- ARI's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.01% |
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
- ARI pays out 124.11% of its income as dividend. This is not a sustainable payout ratio.
- ARI's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP124.11%
EPS Next 2Y-13.64%
EPS Next 3Y-3.59%
APOLLO COMMERCIAL REAL ESTAT / ARI FAQ
What is the fundamental rating for ARI stock?
ChartMill assigns a fundamental rating of 5 / 10 to ARI.
What is the valuation status for ARI stock?
ChartMill assigns a valuation rating of 5 / 10 to APOLLO COMMERCIAL REAL ESTAT (ARI). This can be considered as Fairly Valued.
How profitable is APOLLO COMMERCIAL REAL ESTAT (ARI) stock?
APOLLO COMMERCIAL REAL ESTAT (ARI) has a profitability rating of 6 / 10.
What are the PE and PB ratios of APOLLO COMMERCIAL REAL ESTAT (ARI) stock?
The Price/Earnings (PE) ratio for APOLLO COMMERCIAL REAL ESTAT (ARI) is 8.95 and the Price/Book (PB) ratio is 0.75.
Is the dividend of APOLLO COMMERCIAL REAL ESTAT sustainable?
The dividend rating of APOLLO COMMERCIAL REAL ESTAT (ARI) is 4 / 10 and the dividend payout ratio is 124.11%.