BrightSpire Capital (NYSE:BRSP) and Apollo Commercial Real Estate Finance (NYSE:ARI) Head-To-Head Analysis

BrightSpire Capital (NYSE:BRSP) and Apollo Commercial Real Estate Finance (NYSE:ARI) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, profitability, analyst recommendations, valuation and risk.

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	$194.89 million	3.79	-$31.15 million	($0.27)	-20.98
Apollo Commercial Real Estate Finance	$271.59 million	5.35	$126.72 million	$0.81	13.50

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for BrightSpire Capital and Apollo Commercial Real Estate Finance, as reported by MarketBeat.com.

	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 price target of $6.75, indicating a potential upside of 19.15%. Apollo Commercial Real Estate Finance has a consensus price target of $11.13, indicating a potential upside of 1.74%. Given BrightSpire Capital’s stronger consensus rating and higher probable upside, research analysts clearly believe BrightSpire Capital is more favorable than Apollo Commercial Real Estate Finance.

Volatility & Risk

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.

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 & 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 large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

BrightSpire Capital pays an annual dividend of $0.64 per share and has a dividend yield of 11.3%. 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.

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.