ARMOUR Residential REIT (NYSE: ARR) is one of 44 public companies in the “Residential REITs” industry, but how does it compare to its peers? We will compare ARMOUR Residential REIT to similar companies based on the strength of its profitability, analyst recommendations, valuation, risk, earnings, institutional ownership and dividends.

Dividends

ARMOUR Residential REIT pays an annual dividend of $2.28 per share and has a dividend yield of 8.7%. ARMOUR Residential REIT pays out 30.0% of its earnings in the form of a dividend. As a group, “Residential REITs” companies pay a dividend yield of 3.3% and pay out 119.7% of their earnings in the form of a dividend. ARMOUR Residential REIT has increased its dividend for 2 consecutive years. ARMOUR Residential REIT is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Profitability

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

Net Margins Return on Equity Return on Assets
ARMOUR Residential REIT 114.11% 9.26% 1.31%
ARMOUR Residential REIT Competitors 19.05% 5.17% 2.00%

Institutional and Insider Ownership

46.1% of ARMOUR Residential REIT shares are owned by institutional investors. Comparatively, 77.3% of shares of all “Residential REITs” companies are owned by institutional investors. 1.2% of ARMOUR Residential REIT shares are owned by insiders. Comparatively, 7.1% of shares of all “Residential REITs” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares ARMOUR Residential REIT and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
ARMOUR Residential REIT $331.03 million N/A 3.43
ARMOUR Residential REIT Competitors $679.83 million $379.54 million 1.01

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for ARMOUR Residential REIT and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ARMOUR Residential REIT 0 1 0 0 2.00
ARMOUR Residential REIT Competitors 288 1335 1274 36 2.36

ARMOUR Residential REIT presently has a consensus target price of $24.00, suggesting a potential downside of 7.94%. As a group, “Residential REITs” companies have a potential upside of 1.83%. Given ARMOUR Residential REIT’s peers stronger consensus rating and higher possible upside, analysts clearly believe ARMOUR Residential REIT has less favorable growth aspects than its peers.

Volatility & Risk

ARMOUR Residential REIT has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, ARMOUR Residential REIT’s peers have a beta of 0.61, indicating that their average stock price is 39% less volatile than the S&P 500.

Summary

ARMOUR Residential REIT peers beat ARMOUR Residential REIT on 8 of the 14 factors compared.

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.

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