APOLLO COMMERCIAL REAL ESTAT (ARI) Stock Fundamental Analysis
NYSE:ARI - New York Stock Exchange, Inc. - US03762U1051 - REIT - Currency: USD
We assign a fundamental rating of 4 out of 10 to ARI. ARI was compared to 64 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 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.
ARI had a positive operating cash flow in the past year.
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
The Return On Assets of ARI (-1.61%) is worse than 90.63% of its industry peers.
Looking at the Return On Equity, with a value of -7.21%, ARI is doing worse than 92.19% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 1.56%, ARI belongs to the top of the industry, outperforming 85.94% 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 1.57%.
| 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
Looking at the Operating Margin, with a value of 17.90%, ARI is in the better half of the industry, outperforming 62.50% of the companies in the same industry.
ARI's Operating Margin has declined in the last couple of years.
ARI's Gross Margin of 37.60% is fine compared to the rest of the industry. ARI outperforms 62.50% of its industry peers.
In the last couple of years the Gross Margin of ARI has declined.
| 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
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
Compared to 5 years ago, ARI has less shares outstanding
The debt/assets ratio for ARI is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.04, 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 0.04, ARI is in line with its industry, outperforming 59.38% of the companies in the same industry.
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.
The Debt to FCF ratio of ARI (203.98) is worse than 62.50% 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's Debt to Equity ratio of 2.87 is fine compared to the rest of the industry. ARI outperforms 71.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.87 | ||
| Debt/FCF | 203.98 | ||
| Altman-Z | 0.04 |
ROIC/WACC0.21
WACC7.34%
2.3 Liquidity
ARI has a Current 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.
The Current ratio of ARI (0.34) is comparable to the rest of the industry.
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 has a Quick ratio of 0.34. This is comparable to the rest of the industry: ARI outperforms 57.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.34 | ||
| Quick Ratio | 0.34 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 20.91% over the past year.
The Earnings Per Share has been decreasing by -6.89% on average over the past years.
ARI shows a small growth in Revenue. In the last year, the Revenue has grown by 0.19%.
The Revenue has been growing by 10.63% on average over the past years. This is quite good.
EPS 1Y (TTM)20.91%
EPS 3Y0%
EPS 5Y-6.89%
EPS Q2Q%-11.11%
Revenue 1Y (TTM)0.19%
Revenue growth 3Y21.79%
Revenue growth 5Y10.63%
Sales Q2Q%-25%
3.2 Future
The Earnings Per Share is expected to decrease by -6.14% on average over the next years.
Based on estimates for the next years, ARI will show a small growth in Revenue. The Revenue will grow by 2.65% on average per year.
EPS Next Y-36.67%
EPS Next 2Y-6.14%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-0.66%
Revenue Next 2Y2.65%
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 stable.
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
A Price/Earnings ratio of 7.40 indicates a rather cheap valuation of ARI.
Based on the Price/Earnings ratio, ARI is valued cheaply inside the industry as 85.94% of the companies are valued more expensively.
ARI is valuated cheaply when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 11.68 indicates a reasonable valuation of ARI.
ARI's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.68, ARI is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.4 | ||
| Fwd PE | 11.68 |
4.2 Price Multiples
ARI's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ARI is cheaper than 85.94% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as ARI.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 43.62 | ||
| EV/EBITDA | 47.62 |
4.3 Compensation for Growth
ARI's earnings are expected to decrease with -6.14% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-6.14%
EPS Next 3YN/A
5. Dividend
5.1 Amount
ARI has a Yearly Dividend Yield of 10.03%, which is a nice return.
Compared to an average industry Dividend Yield of 12.96, ARI's dividend is way lower than its industry peers. On top of this 85.94% of the companies listed in the same industry pay a better dividend than ARI!
Compared to an average S&P500 Dividend Yield of 2.27, ARI pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.03% |
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.
The dividend of ARI decreased in the last 3 years.
Dividend Growth(5Y)-6.89%
Div Incr Years0
Div Non Decr Years2
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.
The Dividend Rate of ARI has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP-146.66%
EPS Next 2Y-6.14%
EPS Next 3YN/A
9.84
-0.13 (-1.3%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners66.38%
Inst Owner Change-95.75%
Ins Owners0.68%
Ins Owner Change-5.12%
Market Cap1.37B
Analysts50
Price Target9.52 (-3.25%)
Short Float %2.63%
Short Ratio2.96
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.03% |
Yearly Dividend1.42
Dividend Growth(5Y)-6.89%
DP-146.66%
Div Incr Years0
Div Non Decr Years2
Ex-DateN/A
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)3.7%
PT rev (3m)3.7%
EPS NQ rev (1m)-1.44%
EPS NQ rev (3m)-22.16%
EPS NY rev (1m)-0.71%
EPS NY rev (3m)0.08%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-14.55%
Revenue NY rev (1m)6.26%
Revenue NY rev (3m)6.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.4 | ||
| Fwd PE | 11.68 | ||
| P/S | 1.69 | ||
| P/FCF | 43.62 | ||
| P/OCF | 6.8 | ||
| P/B | 0.73 | ||
| P/tB | 0.73 | ||
| EV/EBITDA | 47.62 |
EPS(TTM)1.33
EY13.52%
EPS(NY)0.84
Fwd EY8.56%
FCF(TTM)0.23
FCFY2.29%
OCF(TTM)1.45
OCFY14.7%
SpS5.82
BVpS13.5
TBVpS13.5
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
WACC7.34%
ROIC/WACC0.21
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)20.91%
EPS 3Y0%
EPS 5Y-6.89%
EPS Q2Q%-11.11%
EPS Next Y-36.67%
EPS Next 2Y-6.14%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)0.19%
Revenue growth 3Y21.79%
Revenue growth 5Y10.63%
Sales Q2Q%-25%
Revenue Next Year-0.66%
Revenue Next 2Y2.65%
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%