BrightSpire Capital (NYSE:BRSP – Get Free Report) and Apollo Commercial Real Estate Finance (NYSE:ARI – Get Free Report) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.
Earnings & Valuation
This table compares BrightSpire Capital and Apollo Commercial Real Estate Finance”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| BrightSpire Capital | $329.76 million | 2.33 | -$31.15 million | ($0.27) | -21.84 |
| Apollo Commercial Real Estate Finance | $271.59 million | 5.39 | $126.72 million | $0.81 | 13.62 |
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for BrightSpire Capital and Apollo Commercial Real Estate Finance, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| BrightSpire Capital | 1 | 1 | 4 | 0 | 2.50 |
| Apollo Commercial Real Estate Finance | 0 | 4 | 2 | 0 | 2.33 |
BrightSpire Capital presently has a consensus target price of $6.75, indicating a potential upside of 14.45%. Apollo Commercial Real Estate Finance has a consensus target price of $11.13, indicating a potential upside of 0.87%. Given BrightSpire Capital’s stronger consensus rating and higher possible upside, equities analysts clearly believe BrightSpire Capital is more favorable than Apollo Commercial Real Estate Finance.
Profitability
This table compares BrightSpire Capital and Apollo Commercial Real Estate Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| BrightSpire Capital | -24.16% | 7.46% | 2.03% |
| Apollo Commercial Real Estate Finance | 48.01% | 7.87% | 1.48% |
Institutional and Insider Ownership
56.6% of BrightSpire Capital shares are owned by institutional investors. Comparatively, 54.4% of Apollo Commercial Real Estate Finance shares are owned by institutional investors. 2.8% of BrightSpire Capital shares are owned by insiders. Comparatively, 0.7% of Apollo Commercial Real Estate Finance shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Risk and Volatility
BrightSpire Capital has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500. Comparatively, Apollo Commercial Real Estate Finance has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500.
Dividends
BrightSpire Capital pays an annual dividend of $0.64 per share and has a dividend yield of 10.9%. Apollo Commercial Real Estate Finance pays an annual dividend of $1.00 per share and has a dividend yield of 9.1%. BrightSpire Capital pays out -237.0% of its earnings in the form of a dividend. Apollo Commercial Real Estate Finance pays out 123.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BrightSpire Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
BrightSpire Capital beats Apollo Commercial Real Estate Finance on 9 of the 16 factors compared between the two stocks.
About BrightSpire Capital
BrightSpire Capital, Inc. operates as a commercial real estate (CRE) credit real estate investment trust in the United States and Europe. The company operates through Senior and Mezzanine Loans and Preferred Equity; Net Leased and Other Real Estate; and Corporate and Other segments. It focuses on originating, acquiring, financing, and managing a diversified portfolio of CRE debt investments consisting of first mortgage loans, senior loans, debt securities, mezzanine loans, and preferred equity investments, as well as net leased properties. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as Colony Credit Real Estate, Inc. and changed its name to BrightSpire Capital, Inc. in June 2021. BrightSpire Capital, Inc. was incorporated in 2017 and is headquartered in New York, New York.
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.
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