Contrasting Acadia Realty Trust (NYSE:AKR) and Apollo Commercial Real Estate Finance (NYSE:ARI)

Apollo Commercial Real Estate Finance (NYSE:ARI) and Acadia Realty Trust (NYSE:AKR) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Apollo Commercial Real Estate Finance and Acadia Realty Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Apollo Commercial Real Estate Finance	0	4	0	0	2.00
Acadia Realty Trust	0	2	2	0	2.50

Apollo Commercial Real Estate Finance currently has a consensus target price of $9.08, indicating a potential downside of 8.88%. Acadia Realty Trust has a consensus target price of $23.00, indicating a potential upside of 6.43%. Given Acadia Realty Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Acadia Realty Trust is more favorable than Apollo Commercial Real Estate Finance.

Volatility & Risk

Apollo Commercial Real Estate Finance has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500. Comparatively, Acadia Realty Trust has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Apollo Commercial Real Estate Finance	-39.40%	9.37%	2.03%
Acadia Realty Trust	5.74%	0.88%	0.48%

Institutional & Insider Ownership

54.4% of Apollo Commercial Real Estate Finance shares are held by institutional investors. Comparatively, 97.7% of Acadia Realty Trust shares are held by institutional investors. 0.7% of Apollo Commercial Real Estate Finance shares are held by company insiders. Comparatively, 2.8% of Acadia Realty Trust shares are held 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.

Dividends

Apollo Commercial Real Estate Finance pays an annual dividend of $1.00 per share and has a dividend yield of 10.0%. Acadia Realty Trust pays an annual dividend of $0.80 per share and has a dividend yield of 3.7%. Apollo Commercial Real Estate Finance pays out -105.3% of its earnings in the form of a dividend. Acadia Realty Trust pays out 444.4% 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.

Valuation and Earnings

This table compares Apollo Commercial Real Estate Finance and Acadia Realty Trust”s gross 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	$195.66 million	7.08	-$119.64 million	($0.95)	-10.49
Acadia Realty Trust	$359.69 million	7.19	$21.65 million	$0.18	120.06

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

Summary

Acadia Realty Trust beats Apollo Commercial Real Estate Finance on 11 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 Acadia Realty Trust

Acadia Realty Trust is an equity real estate investment trust focused on delivering long-term, profitable growth via its dual Core Portfolio and Fund operating platforms and its disciplined, location-driven investment strategy. Acadia Realty Trust is accomplishing this goal by building a best-in-class core real estate portfolio with meaningful concentrations of assets in the nation's most dynamic corridors; making profitable opportunistic and value-add investments through its series of discretionary, institutional funds; and maintaining a strong balance sheet.