Analyzing ARMOUR Residential REIT (ARR) and Its Rivals

ARMOUR Residential REIT (NYSE:ARR) is one of 52 publicly-traded companies in the “Mortgage Real Estate Investment Trusts (REITs)” industry, but how does it compare to its competitors? We will compare ARMOUR Residential REIT to similar businesses based on the strength of its profitability, earnings, dividends, institutional ownership, valuation, analyst recommendations and risk.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for ARMOUR Residential REIT and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARMOUR Residential REIT	1	3	2	0	2.17
ARMOUR Residential REIT Competitors	669	1974	2125	136	2.35

ARMOUR Residential REIT currently has a consensus target price of $16.56, indicating a potential upside of 30.57%. As a group, “Mortgage Real Estate Investment Trusts (REITs)” companies have a potential upside of 41.08%. Given ARMOUR Residential REIT’s competitors stronger consensus rating and higher possible upside, analysts plainly believe ARMOUR Residential REIT has less favorable growth aspects than its competitors.

Profitability

This table compares ARMOUR Residential REIT and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARMOUR Residential REIT	-5.09%	15.90%	1.73%
ARMOUR Residential REIT Competitors	0.13%	7.75%	1.13%

Institutional and Insider Ownership

54.2% of ARMOUR Residential REIT shares are held by institutional investors. Comparatively, 52.3% of shares of all “Mortgage Real Estate Investment Trusts (REITs)” companies are held by institutional investors. 0.2% of ARMOUR Residential REIT shares are held by insiders. Comparatively, 4.8% of shares of all “Mortgage Real Estate Investment Trusts (REITs)” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

ARMOUR Residential REIT pays an annual dividend of $2.88 per share and has a dividend yield of 22.7%. ARMOUR Residential REIT pays out -9,600.0% of its earnings in the form of a dividend. As a group, “Mortgage Real Estate Investment Trusts (REITs)” companies pay a dividend yield of 16.2% and pay out -376.4% of their earnings in the form of a dividend. ARMOUR Residential REIT is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Volatility & Risk

ARMOUR Residential REIT has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500. Comparatively, ARMOUR Residential REIT’s competitors have a beta of 1.18, suggesting that their average stock price is 18% more volatile than the S&P 500.

Earnings & Valuation

This table compares ARMOUR Residential REIT and its competitors gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
ARMOUR Residential REIT	-$38.80 million	$322.69 million	-422.83
ARMOUR Residential REIT Competitors	$596.58 million	$157.00 million	20.73

ARMOUR Residential REIT’s competitors have higher revenue, but lower earnings than ARMOUR Residential REIT. ARMOUR Residential REIT is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Summary

ARMOUR Residential REIT competitors beat ARMOUR Residential REIT on 8 of the 15 factors compared.

ARMOUR Residential REIT Company Profile

ARMOUR Residential REIT, Inc. invests in residential mortgage-backed securities (MBS) in the United States. Its securities portfolio primarily consists of the United States Government-sponsored entity's (GSE) and the Government National Mortgage Administration's issued or guaranteed securities backed by fixed rate, hybrid adjustable rate, and adjustable-rate home loans; and unsecured notes and bonds issued by the GSE and the United States treasuries, as well as money market instruments. 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. ARMOUR Residential REIT, Inc. was incorporated in 2008 and is based in Vero Beach, Florida.