Apollo Commercial: More Than Meets The Eye (Rating Upgrade)
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Apollo Commercial Real Estate Finance (ARI) has improved its dividend safety by cutting its dividend in 3Q24, enhancing its pay-out ratio. Despite market challenges and loan losses, ARI profited from $1.9 billion in new loan originations in 2024. The stock is undervalued, trading at a 25% discount to book value, offering a favorable risk/reward profile compared to peers like Blackstone Mortgage Trust.
February 23, 2025 | 12:15 pm
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Apollo Commercial Real Estate Finance's dividend cut in 3Q24 has improved its dividend pay-out ratio, making it safer. The company profited from $1.9 billion in new loan originations in 2024, despite facing significant loan losses. ARI's stock is undervalued, trading at a 25% discount to book value, presenting a favorable risk/reward profile.
The dividend cut improves the safety of ARI's dividend, which is a positive signal for income-focused investors. The significant new loan originations indicate strong business activity, despite the challenges of loan losses. The stock's undervaluation at a 25% discount to book value suggests potential for price appreciation, making it attractive to value investors.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100