Arbor Realty Trust (NYSE: ABR) and CIM Commercial Trust Corporation (NASDAQ:CMCT) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitabiliy, analyst recommendations, valuation, institutional ownership, dividends and risk.

Risk and Volatility

Arbor Realty Trust has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500. Comparatively, CIM Commercial Trust Corporation has a beta of 0.18, indicating that its share price is 82% less volatile than the S&P 500.

Profitability

This table compares Arbor Realty Trust and CIM Commercial Trust Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arbor Realty Trust 54.47% 10.85% 2.50%
CIM Commercial Trust Corporation 76.25% 19.10% 9.45%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Arbor Realty Trust and CIM Commercial Trust Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arbor Realty Trust 0 1 1 0 2.50
CIM Commercial Trust Corporation 0 0 0 0 N/A

Arbor Realty Trust currently has a consensus price target of $8.88, indicating a potential upside of 7.97%. Given Arbor Realty Trust’s higher probable upside, research analysts clearly believe Arbor Realty Trust is more favorable than CIM Commercial Trust Corporation.

Valuation and Earnings

This table compares Arbor Realty Trust and CIM Commercial Trust Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Arbor Realty Trust $214.05 million 1.99 $58.07 million $1.12 7.34
CIM Commercial Trust Corporation $264.26 million 4.97 $104.47 million N/A N/A

CIM Commercial Trust Corporation has higher revenue and earnings than Arbor Realty Trust.

Insider & Institutional Ownership

37.2% of Arbor Realty Trust shares are held by institutional investors. Comparatively, 0.6% of CIM Commercial Trust Corporation shares are held by institutional investors. 16.5% of Arbor Realty Trust shares are held by company insiders. Comparatively, 98.2% of CIM Commercial Trust Corporation shares are held by company 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.

Dividends

Arbor Realty Trust pays an annual dividend of $0.72 per share and has a dividend yield of 8.8%. CIM Commercial Trust Corporation pays an annual dividend of $0.50 per share and has a dividend yield of 3.2%. Arbor Realty Trust pays out 64.3% of its earnings in the form of a dividend. CIM Commercial Trust Corporation has raised its dividend for 5 consecutive years.

Summary

CIM Commercial Trust Corporation beats Arbor Realty Trust on 9 of the 15 factors compared between the two stocks.

Arbor Realty Trust Company Profile

Arbor Realty Trust, Inc. is a real estate investment trust. The Company invests in a portfolio of structured finance assets in the multifamily and commercial real estate markets, primarily consisting of bridge and mezzanine loans, including junior participating interests in first mortgages, preferred and direct equity. Its segments include Structured Business and Agency Business. In addition, the Company may also directly acquire real property and invest in real estate-related notes and certain mortgage-related securities. It focuses on investment types, such as Bridge Financing, Mezzanine Financing, Junior Participation Financing and Preferred Equity Investments. It offers bridge financing products to borrowers, typically seeking short-term capital to use in an acquisition of property. It offers mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction.

CIM Commercial Trust Corporation Company Profile

CIM Commercial Trust Corporation, together with its subsidiaries, primarily invests in, owns, and operates Class A and office investments in urban communities throughout the United States. These communities are located in areas that include traditional downtown areas and suburban main streets. The Company’s segments are office, hotel, multifamily and lending. The products for its office segment primarily include rental of office space and other tenant services, including tenant reimbursements, parking, and storage space rental. The products for its multifamily segment include rental of apartments and other tenant services. The products for its hotel segment include revenues generated from the operations of hotel properties and rental income generated from a garage located directly across the street from one of the hotels. The Company is managed by affiliates of CIM Group, L.P. (CIM), a vertically integrated, full-service investment manager.

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