Apollo Commercial Real Estate Finance (NYSE:ARI – Get Free Report) and City Office REIT (NYSE:CIO – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.
Insider & Institutional Ownership
54.4% of Apollo Commercial Real Estate Finance shares are owned by institutional investors. Comparatively, 67.5% of City Office REIT shares are owned by institutional investors. 0.7% of Apollo Commercial Real Estate Finance shares are owned by company insiders. Comparatively, 3.9% of City Office REIT shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Volatility and Risk
Apollo Commercial Real Estate Finance has a beta of 1.75, suggesting that its stock price is 75% more volatile than the S&P 500. Comparatively, City Office REIT has a beta of 1.93, suggesting that its stock price is 93% more volatile than the S&P 500.
Dividends
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for Apollo Commercial Real Estate Finance and City Office REIT, as provided by MarketBeat.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Apollo Commercial Real Estate Finance | 1 | 4 | 0 | 0 | 1.80 |
City Office REIT | 0 | 1 | 0 | 0 | 2.00 |
Apollo Commercial Real Estate Finance currently has a consensus target price of $10.25, suggesting a potential downside of 0.87%. Given Apollo Commercial Real Estate Finance’s higher possible upside, analysts clearly believe Apollo Commercial Real Estate Finance is more favorable than City Office REIT.
Valuation & Earnings
This table compares Apollo Commercial Real Estate Finance and City Office REIT’s revenue, earnings per share (EPS) and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Apollo Commercial Real Estate Finance | $332.85 million | 4.42 | $58.13 million | ($0.78) | -13.26 |
City Office REIT | $175.37 million | 1.36 | -$2.68 million | ($0.28) | -21.25 |
Apollo Commercial Real Estate Finance has higher revenue and earnings than City Office REIT. City Office REIT is trading at a lower price-to-earnings ratio than Apollo Commercial Real Estate Finance, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Apollo Commercial Real Estate Finance and City Office REIT’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Apollo Commercial Real Estate Finance | -28.20% | 5.88% | 1.38% |
City Office REIT | -4.02% | -1.06% | -0.46% |
Summary
Apollo Commercial Real Estate Finance beats City Office REIT on 9 of the 15 factors compared between the two stocks.
About Apollo Commercial Real Estate Finance
Apollo Commercial Real Estate Finance, Inc. operates as a real estate investment trust (REIT) that originates, acquires, invests in, and manages commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments in the United States, the United Kingdom, and Europe. It is qualified as a REIT under the Internal Revenue Code. As a REIT, it would not be subject to federal income taxes, if the company distributes at least 90% of its REIT taxable income to its stockholders. Apollo Commercial Real Estate Finance, Inc. was incorporated in 2009 and is based in New York, New York.
About City Office REIT
City Office REIT is an internally-managed real estate company focused on acquiring, owning and operating high-quality office properties located predominantly in Sun Belt markets. City Office currently owns or has a controlling interest in 5.7 million square feet of office properties. The Company has elected to be taxed as a real estate investment trust for U.S. federal income tax purposes.
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