Reviewing Apollo Commercial Real Estate Finance (NYSE:ARI) & Boston Properties (NYSE:BXP)

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

Dividends

Boston Properties pays an annual dividend of $3.92 per share and has a dividend yield of 5.5%. Apollo Commercial Real Estate Finance pays an annual dividend of $1.00 per share and has a dividend yield of 10.0%. Boston Properties pays out 3,920.4% 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 pays out -105.3% of its earnings in the form of a dividend. Apollo Commercial Real Estate Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Boston Properties has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500. Comparatively, Apollo Commercial Real Estate Finance has a beta of 1.74, suggesting that its stock price is 74% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Boston Properties and Apollo Commercial Real Estate Finance, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Boston Properties	1	5	7	0	2.46
Apollo Commercial Real Estate Finance	1	4	0	0	1.80

Boston Properties currently has a consensus price target of $82.23, suggesting a potential upside of 16.32%. Apollo Commercial Real Estate Finance has a consensus price target of $9.31, suggesting a potential downside of 6.55%. Given Boston Properties’ stronger consensus rating and higher possible upside, analysts plainly believe Boston Properties is more favorable than Apollo Commercial Real Estate Finance.

Institutional & Insider Ownership

98.7% of Boston Properties shares are owned by institutional investors. Comparatively, 54.4% of Apollo Commercial Real Estate Finance shares are owned by institutional investors. 1.4% of Boston Properties 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 hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Boston Properties	0.38%	3.90%	1.24%
Apollo Commercial Real Estate Finance	-35.84%	9.11%	2.01%

Valuation & Earnings

This table compares Boston Properties and Apollo Commercial Real Estate Finance”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Boston Properties	$3.41 billion	3.28	$14.27 million	$0.10	707.02
Apollo Commercial Real Estate Finance	$195.66 million	7.07	$58.13 million	($0.95)	-10.49

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

Summary

Boston Properties beats Apollo Commercial Real Estate Finance on 9 of the 16 factors compared between the two stocks.

About Boston Properties

Boston Properties, Inc. (NYSE: BXP) (BXP or the Company) is the largest publicly traded developer, owner, and manager of premier workplaces in the United States, concentrated in six dynamic gateway markets – Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC. BXP has delivered places that power progress for our clients and communities for more than 50 years. BXP is a fully integrated real estate company, organized as a real estate investment trust (REIT). Including properties owned by joint ventures, BXP's portfolio totals 53.3 million square feet and 188 properties, including 10 properties under construction/redevelopment. BXP's properties include 167 office properties, 14 retail properties (including two retail properties under construction/redevelopment), six residential properties (including one residential property under construction) and one hotel. BXP is well-known for its inhouse building management expertise and responsiveness to clients' needs. BXP holds a superior track record of developing premium Central Business District (CBD) office buildings, successful mixed-use complexes, suburban office centers and build-to-suit projects for a diverse array of creditworthy clients. BXP actively works to promote its growth and operations in a sustainable and responsible manner. BXP has earned a twelfth consecutive GRESB Green Star recognition and the highest GRESB 5-star Rating. BXP, an S&P 500 company, was founded in 1970 by Mortimer B. Zuckerman and Edward H. Linde and became a public company in 1997.

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.