Apollo Commercial Real Estate Finance (NYSE: ARI) and Manhattan Bridge Capital (NASDAQ:LOAN) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitability, institutional ownership and valuation.

Valuation & Earnings

This table compares Apollo Commercial Real Estate Finance and Manhattan Bridge Capital’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Apollo Commercial Real Estate Finance $221.93 million 8.72 $223.53 million $2.12 8.66
Manhattan Bridge Capital $4.21 million 11.35 $3.08 million $0.38 15.53

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

Dividends

Apollo Commercial Real Estate Finance pays an annual dividend of $1.84 per share and has a dividend yield of 10.0%. Manhattan Bridge Capital pays an annual dividend of $0.41 per share and has a dividend yield of 6.9%. Apollo Commercial Real Estate Finance pays out 86.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Manhattan Bridge Capital pays out 107.9% 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 has raised its dividend for 2 consecutive years. Apollo Commercial Real Estate Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

64.9% of Apollo Commercial Real Estate Finance shares are owned by institutional investors. Comparatively, 11.4% of Manhattan Bridge Capital shares are owned by institutional investors. 0.6% of Apollo Commercial Real Estate Finance shares are owned by company insiders. Comparatively, 32.3% of Manhattan Bridge Capital shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Apollo Commercial Real Estate Finance has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500. Comparatively, Manhattan Bridge Capital has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Apollo Commercial Real Estate Finance and Manhattan Bridge Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apollo Commercial Real Estate Finance 0 4 1 0 2.20
Manhattan Bridge Capital 0 0 1 0 3.00

Apollo Commercial Real Estate Finance currently has a consensus target price of $18.50, indicating a potential upside of 0.82%. Manhattan Bridge Capital has a consensus target price of $7.25, indicating a potential upside of 22.88%. Given Manhattan Bridge Capital’s stronger consensus rating and higher possible upside, analysts clearly believe Manhattan Bridge Capital is more favorable than Apollo Commercial Real Estate Finance.

Profitability

This table compares Apollo Commercial Real Estate Finance and Manhattan Bridge Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Apollo Commercial Real Estate Finance 93.54% 9.59% 5.20%
Manhattan Bridge Capital 59.95% 13.39% 8.37%

Apollo Commercial Real Estate Finance Company Profile

Apollo Commercial Real Estate Finance, Inc. is a real estate investment trust. The Company primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings, commercial mortgage-backed securities (CMBS) and other commercial real estate-related debt investments. The Company targets investments that are secured by institutional quality real estate. The Company’s principal business objective is to make investments in its target assets in order to provide attractive risk adjusted returns to its stockholders over the long term, primarily through dividends and secondarily through capital appreciation. The Company is externally managed and advised by ACREFI Management, LLC.

Manhattan Bridge Capital Company Profile

Manhattan Bridge Capital, Inc. (MBC) is a real estate finance company that specializes in originating, servicing and managing a portfolio of first mortgage loans. The Company offers short-term, secured, non-banking loans to real estate investors to fund their acquisition, renovation, rehabilitation or improvement of properties located in the New York metropolitan area. Its primary business objective is to grow its loan portfolio while protecting and preserving capital in a manner that provides for risk-adjusted returns to its shareholders over the long term through dividends. It intends to achieve this objective by continuing to selectively originate, fund loans secured by first mortgages on residential real estate held for investment located in the New York metropolitan area, and to manage and service its portfolio in a manner designed to generate risk-adjusted returns across a range of market conditions and economic cycles. Its loan portfolio includes various construction loans.

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