ARMOUR Residential REIT (NYSE: ARR) and American Residential Properties (NYSE:ARPI) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, institutional ownership and analyst recommendations.
Earnings and Valuation
This table compares ARMOUR Residential REIT and American Residential Properties’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|ARMOUR Residential REIT||$254.43 million||3.77||$181.15 million||$5.06||4.52|
|American Residential Properties||N/A||N/A||N/A||($1.40)||N/A|
Institutional & Insider Ownership
60.3% of ARMOUR Residential REIT shares are owned by institutional investors. 1.5% of ARMOUR Residential REIT shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
ARMOUR Residential REIT pays an annual dividend of $2.28 per share and has a dividend yield of 10.0%. American Residential Properties pays an annual dividend of $0.40 per share. ARMOUR Residential REIT pays out 45.1% of its earnings in the form of a dividend. American Residential Properties pays out -28.6% 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. American Residential Properties has raised its dividend for 3 consecutive years.
This table compares ARMOUR Residential REIT and American Residential Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|ARMOUR Residential REIT||65.90%||12.51%||1.86%|
|American Residential Properties||-38.70%||-9.17%||-3.64%|
This is a breakdown of current ratings and recommmendations for ARMOUR Residential REIT and American Residential Properties, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|ARMOUR Residential REIT||0||0||0||0||N/A|
|American Residential Properties||0||0||0||0||N/A|
ARMOUR Residential REIT beats American Residential Properties on 9 of the 11 factors compared between the two stocks.
About ARMOUR Residential REIT
ARMOUR Residential REIT, Inc. is a real estate investment trust. The Company invests in and manages a leveraged portfolio of mortgage-backed securities (MBS) and mortgage loans. The Company invests in residential mortgage backed securities issued or guaranteed by a United States Government-sponsored enterprise (GSE), such as the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, or a government agency, such as the Government National Mortgage Association (collectively, Agency Securities). The Company also invests in Interest-Only Securities, which are the interest portions of Agency Securities that are separated and sold individually from the principal portion of the same payment. The Company raises funds for additional funding through equity offerings (including preferred equity), unsecured debt securities and convertible securities (including warrants, preferred equity and debt), among others. It is managed by ARMOUR Capital Management LP.
About American Residential Properties
American Residential Properties, Inc. is an internally managed real estate investment company, which is organized as a real estate investment trust. The Company acquires, owns, renovates, and manages single-family homes as rental properties. American Residential Properties OP, L.P. acts as its operating partnership. American Residential Leasing Company, LLC is a wholly owned subsidiary of its operating partnership. The Company owns 8,893 properties in Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Nevada, North Carolina, Ohio, South Carolina, Tennessee and Texas that were 81% leased, and it managed an additional 437 properties for ARP Phoenix Fund I, LP in Arizona and Nevada. In addition to its primary business, the Company has a private mortgage financing business.
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