Apollo Commercial Real Estate Finance (NYSE:ARI) & Claros Mortgage Trust (NYSE:CMTG) Critical Survey

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

Analyst Ratings

This is a breakdown of current recommendations for Apollo Commercial Real Estate Finance and Claros Mortgage Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Apollo Commercial Real Estate Finance	1	3	2	0	2.17
Claros Mortgage Trust	3	1	0	0	1.25

Apollo Commercial Real Estate Finance presently has a consensus target price of $11.33, indicating a potential upside of 64.49%. Claros Mortgage Trust has a consensus target price of $2.22, indicating a potential upside of 36.83%. Given Apollo Commercial Real Estate Finance’s stronger consensus rating and higher probable upside, analysts clearly believe Apollo Commercial Real Estate Finance is more favorable than Claros Mortgage Trust.

Dividends

Apollo Commercial Real Estate Finance pays an annual dividend of $1.00 per share and has a dividend yield of 14.5%. Claros Mortgage Trust pays an annual dividend of $0.40 per share and has a dividend yield of 24.7%. Apollo Commercial Real Estate Finance pays out 125.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Claros Mortgage Trust pays out -10.4% of its earnings in the form of a dividend. Claros Mortgage Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Apollo Commercial Real Estate Finance has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500. Comparatively, Claros Mortgage Trust has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Apollo Commercial Real Estate Finance	$271.59 million	3.26	$126.72 million	$0.80	8.61
Claros Mortgage Trust	$69.81 million	3.27	-$489.07 million	($3.83)	-0.42

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Apollo Commercial Real Estate Finance	55.49%	7.39%	1.58%
Claros Mortgage Trust	-354.13%	-19.70%	-6.52%

Insider & Institutional Ownership

54.4% of Apollo Commercial Real Estate Finance shares are held by institutional investors. Comparatively, 89.5% of Claros Mortgage Trust shares are held by institutional investors. 0.5% of Apollo Commercial Real Estate Finance shares are held by insiders. Comparatively, 2.6% of Claros Mortgage Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Apollo Commercial Real Estate Finance beats Claros Mortgage Trust on 11 of the 16 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 Claros Mortgage Trust

Claros Mortgage Trust, Inc. operates as a real estate investment trust. It focuses on originating senior and subordinate loans on transitional commercial real estate assets in the United States. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was incorporated in 2015 and is headquartered in New York, New York.