Critical Contrast: Apollo Commercial Real Estate Finance (NYSE:ARI) versus CTO Realty Growth (NYSE:CTO)

CTO Realty Growth (NYSE:CTOGet Free Report) and Apollo Commercial Real Estate Finance (NYSE:ARIGet Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, dividends, risk and earnings.

Analyst Recommendations

This is a breakdown of current recommendations for CTO Realty Growth and Apollo Commercial Real Estate Finance, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CTO Realty Growth 0 0 3 1 3.25
Apollo Commercial Real Estate Finance 1 4 0 0 1.80

CTO Realty Growth presently has a consensus price target of $20.33, suggesting a potential upside of 8.88%. Apollo Commercial Real Estate Finance has a consensus price target of $10.25, suggesting a potential upside of 16.94%. Given Apollo Commercial Real Estate Finance’s higher probable upside, analysts plainly believe Apollo Commercial Real Estate Finance is more favorable than CTO Realty Growth.

Valuation and Earnings

This table compares CTO Realty Growth and Apollo Commercial Real Estate Finance”s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CTO Realty Growth $115.33 million 3.72 $5.53 million $0.55 33.95
Apollo Commercial Real Estate Finance $332.85 million 3.74 $58.13 million ($0.78) -11.24

Apollo Commercial Real Estate Finance has higher revenue and earnings than CTO Realty Growth. Apollo Commercial Real Estate Finance is trading at a lower price-to-earnings ratio than CTO Realty Growth, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

CTO Realty Growth has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Apollo Commercial Real Estate Finance has a beta of 1.75, suggesting that its stock price is 75% more volatile than the S&P 500.

Institutional and Insider Ownership

67.2% of CTO Realty Growth shares are held by institutional investors. Comparatively, 54.4% of Apollo Commercial Real Estate Finance shares are held by institutional investors. 5.0% of CTO Realty Growth shares are held by company insiders. Comparatively, 0.7% of Apollo Commercial Real Estate Finance shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares CTO Realty Growth and Apollo Commercial Real Estate Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CTO Realty Growth 14.52% 3.55% 1.63%
Apollo Commercial Real Estate Finance 7.30% 9.12% 2.09%

Dividends

CTO Realty Growth pays an annual dividend of $1.52 per share and has a dividend yield of 8.1%. Apollo Commercial Real Estate Finance pays an annual dividend of $1.00 per share and has a dividend yield of 11.4%. CTO Realty Growth pays out 276.4% 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 pays out -128.2% of its earnings in the form of a dividend. CTO Realty Growth has raised its dividend for 4 consecutive years. Apollo Commercial Real Estate Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.

About CTO Realty Growth

(Get Free Report)

CTO Realty Growth, Inc. is a publicly traded real estate investment trust that owns and operates a portfolio of high-quality, retail-based properties located primarily in higher growth markets in the United States. CTO also externally manages and owns a meaningful interest in Alpine Income Property Trust, Inc. (NYSE: PINE), a publicly traded net lease REIT.

About Apollo Commercial Real Estate Finance

(Get Free Report)

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.

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