Apollo Residential Mortgage (AMTG) and Orchid Island Capital (ORC) Head-To-Head Analysis
Apollo Residential Mortgage (NYSE: AMTG) and Orchid Island Capital (NYSE:ORC) are both financials companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.
This is a summary of current recommendations for Apollo Residential Mortgage and Orchid Island Capital, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Apollo Residential Mortgage||0||0||0||0||N/A|
|Orchid Island Capital||0||1||0||0||2.00|
Earnings & Valuation
This table compares Apollo Residential Mortgage and Orchid Island Capital’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Apollo Residential Mortgage||N/A||N/A||N/A||($0.93)||-14.67|
|Orchid Island Capital||$2.97 million||148.57||-$2.72 million||($0.06)||-162.31|
Apollo Residential Mortgage has higher revenue, but lower earnings than Orchid Island Capital. Orchid Island Capital is trading at a lower price-to-earnings ratio than Apollo Residential Mortgage, indicating that it is currently the more affordable of the two stocks.
Apollo Residential Mortgage pays an annual dividend of $1.92 per share and has a dividend yield of 14.1%. Orchid Island Capital pays an annual dividend of $1.68 per share and has a dividend yield of 17.2%. Apollo Residential Mortgage pays out -206.4% of its earnings in the form of a dividend. Orchid Island Capital pays out -2,799.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Apollo Residential Mortgage has raised its dividend for 2 consecutive years. Orchid Island Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk & Volatility
Apollo Residential Mortgage has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, Orchid Island Capital has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500.
This table compares Apollo Residential Mortgage and Orchid Island Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Apollo Residential Mortgage||56.35%||10.11%||2.60%|
|Orchid Island Capital||N/A||-3.33%||-0.35%|
Institutional and Insider Ownership
20.6% of Orchid Island Capital shares are owned by institutional investors. 0.9% of Orchid Island Capital shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Orchid Island Capital beats Apollo Residential Mortgage on 6 of the 11 factors compared between the two stocks.
About Apollo Residential Mortgage
Apollo Residential Mortgage, Inc. is a holding company that conducts its business primarily through ARM Operating, LLC and other operating subsidiaries. The Company is primarily engaged in the business of investing in residential mortgage assets in the United States. The Company seeks to generate risk-adjusted returns from its assets to its stockholders over the long term, primarily through dividend distributions and secondarily through capital appreciation. The Company’s portfolio consists of agency residential mortgage-backed securities (RMBS), non-Agency RMBS; securitized mortgage loans, and other mortgage and mortgage related investment securities and other mortgage related investments. The Company may invest in a range of other residential mortgage and mortgage-related assets. The Company is externally managed and advised by ARM Manager, LLC, an indirect subsidiary of Apollo Global Management, LLC.
About Orchid Island Capital
Orchid Island Capital, Inc. is a specialty finance company that invests in residential mortgage-backed securities (RMBS). The Company’s business objective is to provide attractive risk-adjusted total returns to its investors over the long term through a combination of capital appreciation and the payment of regular monthly distributions. Its portfolio consists of two categories of Agency RMBS: pass-through Agency RMBS and structured Agency RMBS. It invests in pass-through securities, which are securities secured by residential real property in which payments of both interest and principal on the securities are generally made monthly. The mortgage loans underlying pass-through certificates are classified into three categories, including fixed-rate mortgages, adjustable-rate mortgages (ARMs) and Hybrid ARMs. It invests in structured Agency RMBS, which include collateralized mortgage obligations, interest only securities, inverse interest only securities and principal only securities.
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