RWT vs. ARI, RC, TWO, PMT, MFA, CIM, ARR, DX, NYMT, and IVR
Should you be buying Redwood Trust stock or one of its competitors? The main competitors of Redwood Trust include Apollo Commercial Real Estate Finance (ARI), Ready Capital (RC), Two Harbors Investment (TWO), PennyMac Mortgage Investment Trust (PMT), MFA Financial (MFA), Chimera Investment (CIM), ARMOUR Residential REIT (ARR), Dynex Capital (DX), New York Mortgage Trust (NYMT), and Invesco Mortgage Capital (IVR). These companies are all part of the "mortgage reits" industry.
Apollo Commercial Real Estate Finance (NYSE:ARI) and Redwood Trust (NYSE:RWT) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, community ranking, valuation, earnings, dividends and media sentiment.
In the previous week, Apollo Commercial Real Estate Finance and Apollo Commercial Real Estate Finance both had 5 articles in the media. Apollo Commercial Real Estate Finance's average media sentiment score of 1.64 beat Redwood Trust's score of 0.34 indicating that Redwood Trust is being referred to more favorably in the news media.
Apollo Commercial Real Estate Finance has higher earnings, but lower revenue than Redwood Trust. Apollo Commercial Real Estate Finance is trading at a lower price-to-earnings ratio than Redwood Trust, indicating that it is currently the more affordable of the two stocks.
Apollo Commercial Real Estate Finance has a beta of 1.69, indicating that its stock price is 69% more volatile than the S&P 500. Comparatively, Redwood Trust has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500.
Apollo Commercial Real Estate Finance pays an annual dividend of $1.40 per share and has a dividend yield of 13.9%. Redwood Trust pays an annual dividend of $0.64 per share and has a dividend yield of 10.1%. Apollo Commercial Real Estate Finance pays out -179.5% of its earnings in the form of a dividend. Redwood Trust pays out 914.3% 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.
54.4% of Apollo Commercial Real Estate Finance shares are owned by institutional investors. Comparatively, 74.3% of Redwood Trust shares are owned by institutional investors. 0.7% of Apollo Commercial Real Estate Finance shares are owned by company insiders. Comparatively, 2.5% of Redwood Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Redwood Trust received 96 more outperform votes than Apollo Commercial Real Estate Finance when rated by MarketBeat users. Likewise, 65.46% of users gave Redwood Trust an outperform vote while only 58.86% of users gave Apollo Commercial Real Estate Finance an outperform vote.
Redwood Trust has a net margin of 3.06% compared to Redwood Trust's net margin of -28.20%. Redwood Trust's return on equity of 5.88% beat Apollo Commercial Real Estate Finance's return on equity.
Apollo Commercial Real Estate Finance currently has a consensus price target of $10.38, indicating a potential upside of 2.72%. Redwood Trust has a consensus price target of $7.66, indicating a potential upside of 20.76%. Given Apollo Commercial Real Estate Finance's stronger consensus rating and higher possible upside, analysts clearly believe Redwood Trust is more favorable than Apollo Commercial Real Estate Finance.
Summary
Redwood Trust beats Apollo Commercial Real Estate Finance on 13 of the 20 factors compared between the two stocks.
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This chart shows the number of new MarketBeat users adding RWT and its top 5 competitors to their watchlist. Each company is represented with a line over a 90 day period.
This chart shows the average media sentiment of NYSE and its competitors over the past 90 days as caculated by MarketBeat. The averaged score is equivalent to the following: Very Negative Sentiment <= -1.5, Negative Sentiment > -1.5 and <= -0.5, Neutral Sentiment > -0.5 and < 0.5, Positive Sentiment >= 0.5 and < 1.5, and Very Positive Sentiment >= 1.5.
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