Rayonier (NYSE:RYN) and Apollo Commercial Real Estate Finance (NYSE:ARI) Financial Analysis

Apollo Commercial Real Estate Finance (NYSE:ARI) and Rayonier (NYSE:RYN) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, risk, valuation and profitability.

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, Rayonier has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Dividends

Apollo Commercial Real Estate Finance pays an annual dividend of $1.00 per share and has a dividend yield of 10.9%. Rayonier pays an annual dividend of $1.14 per share and has a dividend yield of 3.7%. Apollo Commercial Real Estate Finance pays out -108.7% of its earnings in the form of a dividend. Rayonier pays out 107.5% 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 Estate Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current recommendations for Apollo Commercial Real Estate Finance and Rayonier, 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
Rayonier	0	2	0	0	2.00

Apollo Commercial Real Estate Finance currently has a consensus target price of $9.63, suggesting a potential upside of 4.73%. Rayonier has a consensus target price of $33.00, suggesting a potential upside of 6.28%. Given Rayonier’s stronger consensus rating and higher possible upside, analysts clearly believe Rayonier is more favorable than Apollo Commercial Real Estate Finance.

Earnings and Valuation

This table compares Apollo Commercial Real Estate Finance and Rayonier”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Apollo Commercial Real Estate Finance	$344.59 million	3.69	$58.13 million	($0.92)	-9.99
Rayonier	$1.06 billion	4.38	$173.49 million	$1.06	29.29

Rayonier has higher revenue and earnings than Apollo Commercial Real Estate Finance. Apollo Commercial Real Estate Finance is trading at a lower price-to-earnings ratio than Rayonier, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Apollo Commercial Real Estate Finance and Rayonier’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Apollo Commercial Real Estate Finance	-35.84%	9.11%	2.01%
Rayonier	15.84%	2.95%	1.52%

Institutional and Insider Ownership

54.4% of Apollo Commercial Real Estate Finance shares are owned by institutional investors. Comparatively, 89.1% of Rayonier shares are owned by institutional investors. 0.7% of Apollo Commercial Real Estate Finance shares are owned by company insiders. Comparatively, 0.8% of Rayonier shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Rayonier beats Apollo Commercial Real Estate Finance on 10 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 Rayonier

Rayonier is a leading timberland real estate investment trust with assets located in some of the most productive softwood timber growing regions in the United States and New Zealand. As of December 31, 2023, Rayonier owned or leased under long-term agreements approximately 2.7 million acres of timberlands located in the U.S. South (1.85 million acres), U.S. Pacific Northwest (418,000 acres) and New Zealand (421,000 acres).