Financial Review: Impac Mortgage (NYSE:IMH) & Apollo Commercial Real Estate Finance (NYSE:ARI)

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Impac Mortgage (NYSE:IMHGet Rating) and Apollo Commercial Real Estate Finance (NYSE:ARIGet Rating) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, dividends, analyst recommendations, institutional ownership, valuation and profitability.

Profitability

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

Net Margins Return on Equity Return on Assets
Impac Mortgage -8.28% -335.75% -1.46%
Apollo Commercial Real Estate Finance 71.47% 8.22% 2.17%

Institutional & Insider Ownership

45.0% of Impac Mortgage shares are owned by institutional investors. Comparatively, 57.6% of Apollo Commercial Real Estate Finance shares are owned by institutional investors. 2.1% of Impac Mortgage shares are owned by company insiders. Comparatively, 0.7% of Apollo Commercial Real Estate Finance shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Impac Mortgage and Apollo Commercial Real Estate Finance, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Impac Mortgage 0 0 0 0 N/A
Apollo Commercial Real Estate Finance 0 1 0 0 2.00

Apollo Commercial Real Estate Finance has a consensus target price of $13.25, indicating a potential upside of 4.50%. Given Apollo Commercial Real Estate Finance’s higher possible upside, analysts clearly believe Apollo Commercial Real Estate Finance is more favorable than Impac Mortgage.

Volatility & Risk

Impac Mortgage has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, Apollo Commercial Real Estate Finance has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500.

Earnings and Valuation

This table compares Impac Mortgage and Apollo Commercial Real Estate Finance’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Impac Mortgage $66.32 million 0.15 -$3.88 million ($0.26) -1.82
Apollo Commercial Real Estate Finance $265.59 million 6.71 $223.51 million $1.13 11.22

Apollo Commercial Real Estate Finance has higher revenue and earnings than Impac Mortgage. Impac Mortgage 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.

Summary

Apollo Commercial Real Estate Finance beats Impac Mortgage on 11 of the 12 factors compared between the two stocks.

About Impac Mortgage

(Get Rating)

Impac Mortgage Holdings, Inc. operates as a residential mortgage lender in the United States. It operates through three segments: Mortgage Lending, Real Estate Services, and Long-Term Mortgage Portfolio. The Mortgage Lending segment provides mortgage lending products through three lending channels, such as retail, wholesale, and correspondent and opportunistically retain mortgage servicing rights. The Real Estate Services segment provides loss mitigation and real estate services primarily on its long-term mortgage portfolio, including default surveillance, loan modification, short sale, and real estate owned surveillance and disposition services, as well as monitoring, reconciling, and reporting services for residential and multifamily mortgage portfolios. This segment provides services to investors, servicers, and individual borrowers primarily focusing on loss mitigation and performance. The Long-Term Mortgage Portfolio segment consists of residual interests in the securitization trusts reflected as trust assets and liabilities in its consolidated balance sheets. Impac Mortgage Holdings, Inc. was incorporated in 1995 and is based in Irvine, California.

About Apollo Commercial Real Estate Finance

(Get Rating)

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. 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 founded in 2009 and is based in New York, New York.

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