Capstead Mortgage (NYSE: CMO) and Apollo Commercial Real Est. Finance (NYSE:ARI) are both small-cap financials companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, profitability, earnings, institutional ownership and dividends.
Capstead Mortgage pays an annual dividend of $0.76 per share and has a dividend yield of 9.1%. Apollo Commercial Real Est. Finance pays an annual dividend of $1.84 per share and has a dividend yield of 10.1%. Capstead Mortgage pays out 116.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apollo Commercial Real Est. Finance pays out 121.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Capstead Mortgage has a beta of 0.18, indicating that its share price is 82% less volatile than the S&P 500. Comparatively, Apollo Commercial Real Est. Finance has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.
This is a breakdown of recent recommendations and price targets for Capstead Mortgage and Apollo Commercial Real Est. Finance, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Apollo Commercial Real Est. Finance||0||2||1||0||2.33|
Capstead Mortgage currently has a consensus price target of $9.50, suggesting a potential upside of 13.77%. Apollo Commercial Real Est. Finance has a consensus price target of $18.50, suggesting a potential upside of 1.31%. Given Capstead Mortgage’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Capstead Mortgage is more favorable than Apollo Commercial Real Est. Finance.
Valuation & Earnings
This table compares Capstead Mortgage and Apollo Commercial Real Est. Finance’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Capstead Mortgage||$233.40 million||3.35||$79.58 million||$0.65||12.85|
|Apollo Commercial Real Est. Finance||$260.46 million||7.53||$193.03 million||$1.51||12.09|
Apollo Commercial Real Est. Finance has higher revenue and earnings than Capstead Mortgage. Apollo Commercial Real Est. Finance is trading at a lower price-to-earnings ratio than Capstead Mortgage, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
71.2% of Capstead Mortgage shares are owned by institutional investors. Comparatively, 69.0% of Apollo Commercial Real Est. Finance shares are owned by institutional investors. 1.7% of Capstead Mortgage shares are owned by insiders. Comparatively, 0.6% of Apollo Commercial Real Est. Finance shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This table compares Capstead Mortgage and Apollo Commercial Real Est. Finance’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Apollo Commercial Real Est. Finance||74.11%||10.22%||5.40%|
Apollo Commercial Real Est. Finance beats Capstead Mortgage on 9 of the 15 factors compared between the two stocks.
Capstead Mortgage Company Profile
Capstead Mortgage Corporation operates as a self-managed real estate investment trust (REIT). The Company manages a leveraged portfolio of residential mortgage pass-through securities consisting of relatively short-duration adjustable-rate mortgage (ARM) securities issued and guaranteed by government-sponsored enterprises, either Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac), or by an agency of the federal government, the Government National Mortgage Association (Ginnie Mae). The Company finances its residential mortgage investments by leveraging its long-term investment capital with secured borrowings consisting primarily of borrowings under repurchase arrangements with commercial banks and other financial institutions. The Company’s portfolio of residential mortgage investments includes residential mortgage investments.
Apollo Commercial Real Est. Finance Company Profile
Apollo Commercial Real Estate Finance, Inc. is a real estate investment trust. The Company primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings, commercial mortgage-backed securities (CMBS) and other commercial real estate-related debt investments. The Company targets investments that are secured by institutional quality real estate. The Company’s principal business objective is to make investments in its target assets in order to provide attractive risk adjusted returns to its stockholders over the long term, primarily through dividends and secondarily through capital appreciation. The Company is externally managed and advised by ACREFI Management, LLC.
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