Phillips Edison & Company, Inc. (NASDAQ:PECO) versus Apollo Commercial Real Estate Finance (NYSE:ARI) Head-To-Head Contrast

Apollo Commercial Real Estate Finance (NYSE:ARI) and Phillips Edison & Company, Inc. (NASDAQ:PECO) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitability and analyst recommendations.

Volatility and Risk

Apollo Commercial Real Estate Finance has a beta of 1.76, meaning that its share price is 76% more volatile than the S&P 500. Comparatively, Phillips Edison & Company, Inc. has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Dividends

Apollo Commercial Real Estate Finance pays an annual dividend of $1.40 per share and has a dividend yield of 13.7%. Phillips Edison & Company, Inc. pays an annual dividend of $1.23 per share and has a dividend yield of 3.3%. Apollo Commercial Real Estate Finance pays out -179.5% of its earnings in the form of a dividend. Phillips Edison & Company, Inc. pays out 267.4% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Apollo Commercial Real Estate Finance and Phillips Edison & Company, Inc.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Apollo Commercial Real Estate Finance	7.30%	9.12%	2.09%
Phillips Edison & Company, Inc.	9.32%	2.23%	1.21%

Valuation and Earnings

This table compares Apollo Commercial Real Estate Finance and Phillips Edison & Company, Inc.”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Apollo Commercial Real Estate Finance	$332.85 million	4.35	$58.13 million	($0.78)	-13.07
Phillips Edison & Company, Inc.	$629.74 million	7.26	$56.85 million	$0.46	81.24

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

Insider & Institutional Ownership

54.4% of Apollo Commercial Real Estate Finance shares are held by institutional investors. Comparatively, 80.7% of Phillips Edison & Company, Inc. shares are held by institutional investors. 0.7% of Apollo Commercial Real Estate Finance shares are held by insiders. Comparatively, 8.0% of Phillips Edison & Company, Inc. shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Apollo Commercial Real Estate Finance and Phillips Edison & Company, Inc., as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Apollo Commercial Real Estate Finance	1	4	0	0	1.80
Phillips Edison & Company, Inc.	0	4	2	0	2.33

Apollo Commercial Real Estate Finance presently has a consensus target price of $10.25, suggesting a potential upside of 0.54%. Phillips Edison & Company, Inc. has a consensus target price of $37.50, suggesting a potential upside of 0.35%. Given Apollo Commercial Real Estate Finance’s higher possible upside, equities analysts clearly believe Apollo Commercial Real Estate Finance is more favorable than Phillips Edison & Company, Inc..

Summary

Phillips Edison & Company, Inc. beats Apollo Commercial Real Estate Finance on 9 of the 16 factors compared between the two stocks.

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.

About Phillips Edison & Company, Inc.

Phillips Edison & Company, Inc. (PECO) is one of the nation's largest owners and operators of omni-channel grocery-anchored shopping centers. Founded in 1991, PECO has generated strong results through its vertically-integrated operating platform and national footprint of well-occupied shopping centers. PECO's centers feature a mix of national and regional retailers providing necessity-based goods and services in fundamentally strong markets throughout the United States. PECO's top grocery anchors include Kroger, Publix, Albertsons and Ahold Delhaize. As of December 31, 2023, PECO managed 301 shopping centers, including 281 wholly-owned centers comprising 32.2 million square feet across 31 states and 20 shopping centers owned in one institutional joint venture. PECO is exclusively focused on creating great omni-channel, grocery-anchored shopping experiences and improving communities, one neighborhood shopping center at a time.