Reviewing CyrusOne (NASDAQ:CONE) and Apollo Commercial Real Estate Finance (NYSE:ARI)

CyrusOne (NASDAQ:CONEGet Rating) and Apollo Commercial Real Estate Finance (NYSE:ARIGet Rating) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Dividends

CyrusOne pays an annual dividend of $2.08 per share and has a dividend yield of 2.3%. Apollo Commercial Real Estate Finance pays an annual dividend of $1.40 per share and has a dividend yield of 10.5%. CyrusOne pays out 990.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apollo Commercial Real Estate Finance pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CyrusOne has raised its dividend for 8 consecutive years. Apollo Commercial Real Estate Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

CyrusOne has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500. Comparatively, Apollo Commercial Real Estate Finance has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for CyrusOne and Apollo Commercial Real Estate Finance, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CyrusOne 0 14 2 0 2.13
Apollo Commercial Real Estate Finance 0 1 0 0 2.00

CyrusOne presently has a consensus target price of $88.22, indicating a potential downside of 2.37%. Given CyrusOne’s stronger consensus rating and higher possible upside, equities analysts clearly believe CyrusOne is more favorable than Apollo Commercial Real Estate Finance.

Insider & Institutional Ownership

87.9% of CyrusOne shares are held by institutional investors. Comparatively, 57.3% of Apollo Commercial Real Estate Finance shares are held by institutional investors. 0.3% of CyrusOne shares are held by insiders. Comparatively, 0.6% of Apollo Commercial Real Estate Finance shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares CyrusOne and Apollo Commercial Real Estate Finance’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CyrusOne $1.21 billion 9.71 $25.30 million $0.21 430.29
Apollo Commercial Real Estate Finance $265.59 million 7.07 $223.51 million $1.40 9.54

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

Profitability

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

Net Margins Return on Equity Return on Assets
CyrusOne 2.10% 1.02% 0.39%
Apollo Commercial Real Estate Finance 81.92% 8.92% 2.61%

Summary

Apollo Commercial Real Estate Finance beats CyrusOne on 9 of the 17 factors compared between the two stocks.

About CyrusOne (Get Rating)

CyrusOne, Inc. is a real estate investment trust, which operates and develops enterprise-class, carrier-neutral, multi-tenant, and single-tenant data center properties. The firm provides data center facilities that protect and ensure the continued operation of IT infrastructure. Its data center properties are purpose-built facilities with redundant power, cooling and telecommunications systems that are not network-specific, enabling customer interconnectivity to a range of telecommunications carriers. The company was founded by David H. Ferdman in 2001 and is headquartered in Dallas, TX.

About Apollo Commercial Real Estate Finance (Get Rating)

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. 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 founded in 2009 and is based in New York, New York.

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