Critical Survey: Apollo Commercial Real Estate Finance (NYSE:ARI) & AG Mortgage Investment Trust (NYSE:MITT)

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

Dividends

Apollo Commercial Real Estate Finance pays an annual dividend of $1.00 per share and has a dividend yield of 9.9%. AG Mortgage Investment Trust pays an annual dividend of $0.84 per share and has a dividend yield of 10.1%. Apollo Commercial Real Estate Finance pays out 112.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AG Mortgage Investment Trust pays out 90.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AG Mortgage Investment Trust has raised its dividend for 2 consecutive years. AG Mortgage Investment Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Apollo Commercial Real Estate Finance has a beta of 1.54, indicating that its share price is 54% more volatile than the S&P 500. Comparatively, AG Mortgage Investment Trust has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500.

Profitability

This table compares Apollo Commercial Real Estate Finance and AG Mortgage Investment Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Apollo Commercial Real Estate Finance	51.40%	8.34%	1.70%
AG Mortgage Investment Trust	11.03%	13.88%	0.59%

Earnings and Valuation

This table compares Apollo Commercial Real Estate Finance and AG Mortgage Investment Trust”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	$303.67 million	4.62	-$119.64 million	$0.89	11.34
AG Mortgage Investment Trust	$408.49 million	0.65	$55.74 million	$0.93	8.96

AG Mortgage Investment Trust has higher revenue and earnings than Apollo Commercial Real Estate Finance. AG Mortgage Investment Trust 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.

Analyst Ratings

This is a breakdown of current ratings and target prices for Apollo Commercial Real Estate Finance and AG Mortgage Investment Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Apollo Commercial Real Estate Finance	0	4	3	0	2.43
AG Mortgage Investment Trust	0	3	4	0	2.57

Apollo Commercial Real Estate Finance currently has a consensus price target of $10.88, suggesting a potential upside of 7.73%. AG Mortgage Investment Trust has a consensus price target of $8.60, suggesting a potential upside of 3.24%. Given Apollo Commercial Real Estate Finance’s higher possible upside, equities analysts plainly believe Apollo Commercial Real Estate Finance is more favorable than AG Mortgage Investment Trust.

Insider & Institutional Ownership

54.4% of Apollo Commercial Real Estate Finance shares are owned by institutional investors. Comparatively, 27.3% of AG Mortgage Investment Trust shares are owned by institutional investors. 0.7% of Apollo Commercial Real Estate Finance shares are owned by company insiders. Comparatively, 3.8% of AG Mortgage Investment Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

AG Mortgage Investment Trust beats Apollo Commercial Real Estate Finance on 11 of the 17 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 AG Mortgage Investment Trust

AG Mortgage Investment Trust, Inc. operates as a residential mortgage real estate investment trust in the United States. Its investment portfolio includes residential investments, including non-agency loans, agency-eligible loans, re-and non-performing loans, and non-agency residential mortgage-backed securities, as well as commercial loans and commercial mortgage-backed securities. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. AG Mortgage Investment Trust, Inc. was incorporated in 2011 and is based in New York, New York.