Apollo Residential Mortgage (NYSE: AMTG) and AG Mortgage Investment Trust (NYSE:MITT) are both small-cap financials companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Dividends

Apollo Residential Mortgage pays an annual dividend of $1.92 per share and has a dividend yield of 14.1%. AG Mortgage Investment Trust pays an annual dividend of $1.90 per share and has a dividend yield of 9.9%. Apollo Residential Mortgage pays out -204.3% of its earnings in the form of a dividend. AG Mortgage Investment Trust pays out 66.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. AG Mortgage Investment Trust has increased its dividend for 2 consecutive years. Apollo Residential Mortgage is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Apollo Residential Mortgage has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, AG Mortgage Investment Trust has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500.

Earnings & Valuation

This table compares Apollo Residential Mortgage and AG Mortgage Investment Trust’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Apollo Residential Mortgage N/A N/A N/A ($0.94) -14.51
AG Mortgage Investment Trust $123.01 million 4.40 $63.68 million $2.86 6.71

AG Mortgage Investment Trust has higher revenue and earnings than Apollo Residential Mortgage. Apollo Residential Mortgage is trading at a lower price-to-earnings ratio than AG Mortgage Investment Trust, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Apollo Residential Mortgage and AG Mortgage Investment Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apollo Residential Mortgage 0 0 0 0 N/A
AG Mortgage Investment Trust 0 3 0 0 2.00

AG Mortgage Investment Trust has a consensus price target of $18.17, suggesting a potential downside of 5.38%. Given AG Mortgage Investment Trust’s higher probable upside, analysts plainly believe AG Mortgage Investment Trust is more favorable than Apollo Residential Mortgage.

Profitability

This table compares Apollo Residential Mortgage and AG Mortgage Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Apollo Residential Mortgage 56.35% 10.11% 2.60%
AG Mortgage Investment Trust 74.99% 11.21% 1.93%

Institutional & Insider Ownership

64.7% of AG Mortgage Investment Trust shares are owned by institutional investors. 1.6% of AG Mortgage Investment Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

AG Mortgage Investment Trust beats Apollo Residential Mortgage on 9 of the 12 factors compared between the two stocks.

About Apollo Residential Mortgage

Apollo Residential Mortgage, Inc. is a holding company that conducts its business primarily through ARM Operating, LLC and other operating subsidiaries. The Company is primarily engaged in the business of investing in residential mortgage assets in the United States. The Company seeks to generate risk-adjusted returns from its assets to its stockholders over the long term, primarily through dividend distributions and secondarily through capital appreciation. The Company’s portfolio consists of agency residential mortgage-backed securities (RMBS), non-Agency RMBS; securitized mortgage loans, and other mortgage and mortgage related investment securities and other mortgage related investments. The Company may invest in a range of other residential mortgage and mortgage-related assets. The Company is externally managed and advised by ARM Manager, LLC, an indirect subsidiary of Apollo Global Management, LLC.

About AG Mortgage Investment Trust

AG Mortgage Investment Trust, Inc. is a real estate investment trust (REIT). The Company focuses on investing in, acquiring and managing a diversified portfolio of residential mortgage assets, other real estate-related securities and financial assets, which the Company refers to as its target assets. It also focuses on investing in residential mortgage-backed securities (RMBS) issued or guaranteed by a government-sponsored enterprise, such as The Federal National Mortgage Association (Fannie Mae) or The Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, GSEs), or any agency of the United States Government, such as The Government National Mortgage Association (Ginnie Mae) (collectively Agency RMBS), and other real estate-related securities and financial assets, including Non-Agency RMBS, asset backed securities (ABS), commercial mortgage-backed securities (CMBS) and loans.

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