Apollo Commercial Real Estate Finance (NYSE:ARI – Get Free Report) and Phillips Edison & Company, Inc. (NASDAQ:PECO – Get Free Report) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, profitability, analyst recommendations, institutional ownership and dividends.
Profitability
This table compares Apollo Commercial Real Estate Finance and Phillips Edison & Company, Inc.’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Apollo Commercial Real Estate Finance | 7.30% | 9.12% | 2.09% |
| Phillips Edison & Company, Inc. | 9.32% | 2.23% | 1.21% |
Analyst Recommendations
This is a breakdown of current ratings and target prices for Apollo Commercial Real Estate Finance and Phillips Edison & Company, Inc., as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Apollo Commercial Real Estate Finance | 1 | 4 | 0 | 0 | 1.80 |
| Phillips Edison & Company, Inc. | 0 | 4 | 2 | 0 | 2.33 |
Valuation & Earnings
This table compares Apollo Commercial Real Estate Finance and Phillips Edison & Company, Inc.”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Apollo Commercial Real Estate Finance | $332.85 million | 4.08 | $58.13 million | ($0.78) | -12.26 |
| Phillips Edison & Company, Inc. | $629.74 million | 7.57 | $56.85 million | $0.46 | 84.63 |
Apollo Commercial Real Estate Finance has higher earnings, but lower revenue than Phillips Edison & Company, Inc.. Apollo Commercial Real Estate Finance is trading at a lower price-to-earnings ratio than Phillips Edison & Company, Inc., indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
54.4% of Apollo Commercial Real Estate Finance shares are held by institutional investors. Comparatively, 80.7% of Phillips Edison & Company, Inc. shares are held by institutional investors. 0.7% of Apollo Commercial Real Estate Finance shares are held by company insiders. Comparatively, 8.0% of Phillips Edison & Company, Inc. shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Risk and Volatility
Apollo Commercial Real Estate Finance has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500. Comparatively, Phillips Edison & Company, Inc. has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500.
Dividends
Apollo Commercial Real Estate Finance pays an annual dividend of $1.00 per share and has a dividend yield of 10.5%. Phillips Edison & Company, Inc. pays an annual dividend of $1.23 per share and has a dividend yield of 3.2%. Apollo Commercial Real Estate Finance pays out -128.2% of its earnings in the form of a dividend. Phillips Edison & Company, Inc. pays out 267.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apollo Commercial Real Estate Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Phillips Edison & Company, Inc. beats Apollo Commercial Real Estate Finance on 9 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 Phillips Edison & Company, Inc.
Phillips Edison & Company, Inc. (PECO) is one of the nation's largest owners and operators of omni-channel grocery-anchored shopping centers. Founded in 1991, PECO has generated strong results through its vertically-integrated operating platform and national footprint of well-occupied shopping centers. PECO's centers feature a mix of national and regional retailers providing necessity-based goods and services in fundamentally strong markets throughout the United States. PECO's top grocery anchors include Kroger, Publix, Albertsons and Ahold Delhaize. As of December 31, 2023, PECO managed 301 shopping centers, including 281 wholly-owned centers comprising 32.2 million square feet across 31 states and 20 shopping centers owned in one institutional joint venture. PECO is exclusively focused on creating great omni-channel, grocery-anchored shopping experiences and improving communities, one neighborhood shopping center at a time.
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