Head-To-Head Review: ARMOUR Residential REIT (ARR) vs. Its Peers

ARMOUR Residential REIT (NYSE:ARR) is one of 52 publicly-traded companies in the “Mortgage Real Estate Investment Trusts (REITs)” industry, but how does it contrast to its competitors? We will compare ARMOUR Residential REIT to similar businesses based on the strength of its earnings, valuation, dividends, risk, institutional ownership, profitability and analyst recommendations.

Institutional and Insider Ownership

54.2% of ARMOUR Residential REIT shares are owned by institutional investors. Comparatively, 52.3% of shares of all “Mortgage Real Estate Investment Trusts (REITs)” companies are owned by institutional investors. 0.2% of ARMOUR Residential REIT shares are owned by insiders. Comparatively, 4.8% of shares of all “Mortgage Real Estate Investment Trusts (REITs)” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

ARMOUR Residential REIT has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500. Comparatively, ARMOUR Residential REIT’s competitors have a beta of 1.21, meaning that their average stock price is 21% more volatile than the S&P 500.

Earnings and Valuation

This table compares ARMOUR Residential REIT and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
ARMOUR Residential REIT	$800.42 million	$322.69 million	-412.50
ARMOUR Residential REIT Competitors	$551.74 million	$157.00 million	15.45

ARMOUR Residential REIT has higher revenue and earnings than its competitors. ARMOUR Residential REIT is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a breakdown of recent ratings for ARMOUR Residential REIT and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARMOUR Residential REIT	1	3	2	0	2.17
ARMOUR Residential REIT Competitors	680	1981	2134	136	2.35

ARMOUR Residential REIT currently has a consensus price target of $16.56, indicating a potential upside of 33.84%. As a group, “Mortgage Real Estate Investment Trusts (REITs)” companies have a potential upside of 43.33%. Given ARMOUR Residential REIT’s competitors stronger consensus rating and higher probable upside, analysts clearly believe ARMOUR Residential REIT has less favorable growth aspects than its competitors.

Dividends

ARMOUR Residential REIT pays an annual dividend of $2.88 per share and has a dividend yield of 23.3%. ARMOUR Residential REIT pays out -9,600.0% of its earnings in the form of a dividend. As a group, “Mortgage Real Estate Investment Trusts (REITs)” companies pay a dividend yield of 16.3% and pay out -208.9% of their earnings in the form of a dividend. ARMOUR Residential REIT is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Profitability

This table compares ARMOUR Residential REIT and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARMOUR Residential REIT	-5.09%	15.90%	1.73%
ARMOUR Residential REIT Competitors	-4.60%	7.64%	1.08%

Summary

ARMOUR Residential REIT beats its competitors on 8 of the 15 factors compared.

ARMOUR Residential REIT Company Profile

ARMOUR Residential REIT, Inc. invests in residential mortgage-backed securities (MBS) in the United States. Its securities portfolio primarily consists of the United States Government-sponsored entity's (GSE) and the Government National Mortgage Administration's issued or guaranteed securities backed by fixed rate, hybrid adjustable rate, and adjustable-rate home loans; and unsecured notes and bonds issued by the GSE and the United States treasuries, as well as money market instruments. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. ARMOUR Residential REIT, Inc. was incorporated in 2008 and is based in Vero Beach, Florida.