Arbor Realty Trust (NYSE:ABR) & Bimini Capital Management (OTCMKTS:BMNM) Critical Analysis

Bimini Capital Management (OTCMKTS:BMNM) and Arbor Realty Trust (NYSE:ABR) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Volatility and Risk

Bimini Capital Management has a beta of 0.16, indicating that its share price is 84% less volatile than the S&P 500. Comparatively, Arbor Realty Trust has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Bimini Capital Management and Arbor Realty Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bimini Capital Management	0	0	0	0	0.00
Arbor Realty Trust	4	1	1	0	1.50

Arbor Realty Trust has a consensus target price of $7.38, indicating a potential upside of 48.54%. Given Arbor Realty Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Arbor Realty Trust is more favorable than Bimini Capital Management.

Valuation and Earnings

This table compares Bimini Capital Management and Arbor Realty Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bimini Capital Management	$16.89 million	1.34	$5.80 million	$0.60	3.75
Arbor Realty Trust	$940.01 million	1.02	$148.80 million	$0.39	12.73

Arbor Realty Trust has higher revenue and earnings than Bimini Capital Management. Bimini Capital Management is trading at a lower price-to-earnings ratio than Arbor Realty Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Bimini Capital Management and Arbor Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bimini Capital Management	32.69%	56.67%	5.19%
Arbor Realty Trust	12.73%	8.49%	1.46%

Institutional & Insider Ownership

57.3% of Arbor Realty Trust shares are held by institutional investors. 45.8% of Bimini Capital Management shares are held by insiders. Comparatively, 4.2% of Arbor Realty Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Arbor Realty Trust beats Bimini Capital Management on 8 of the 14 factors compared between the two stocks.

About Bimini Capital Management

Bimini Capital Management, Inc., through its subsidiaries, operates as a specialty finance company in the United States. The company operates in two segments, Asset Management and Investment Portfolio. The Asset Management segment includes investment advisory services by Bimini Advisors to Orchid Island Capital, Inc. and Royal Palm Capital, LLC. The Investment Portfolio segment engages in investment activities conducted by Royal Palm Capital, LLC. It invests in residential mortgage-backed securities. The company was formerly known as Opteum Inc. and changed its name to Bimini Capital Management, Inc. in September 2007. Bimini Capital Management, Inc. was founded in 2003 and is based in Vero Beach, Florida.

About Arbor Realty Trust

Arbor Realty Trust, Inc. invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States. The company operates through Structured Business and Agency Business segments. It primarily invests in bridge and mezzanine loans, including junior participating interests in first mortgages, and preferred and direct equity, as well as real estate-related joint ventures, real estate-related notes, and various mortgage-related securities. In addition, the company offers bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property; financing by making preferred equity investments in entities that directly or indirectly own real property; mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction; junior participation financing in the form of a junior participating interest in the senior debt; and financing products to borrowers who are looking to acquire conventional, workforce, and affordable single-family housing. Further, it underwrites, originates, sells, and services multifamily mortgage loans through conduit/commercial mortgage-backed securities programs. 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. Arbor Realty Trust, Inc. was incorporated in 2003 and is headquartered in Uniondale, New York.