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ARMOUR Residential REIT Inc (ARR)ARR
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Upturn Advisory Summary
11/29/2024: ARR (1-star) is currently NOT-A-BUY. Pass it for now.
Analysis of Past Performance
Type: Stock | Upturn Star Rating | Today’s Advisory: PASS |
Historic Profit: -5.97% | Upturn Advisory Performance 3 | Avg. Invested days: 50 |
Profits based on simulation | Stock Returns Performance 1 | Last Close 11/29/2024 |
Type: Stock | Today’s Advisory: PASS |
Historic Profit: -5.97% | Avg. Invested days: 50 |
Upturn Star Rating | Stock Returns Performance 1 |
Profits based on simulation Last Close 11/29/2024 | Upturn Advisory Performance 3 |
Key Highlights
Company Size Small-Cap Stock | Market Capitalization 1.05B USD |
Price to earnings Ratio 6.52 | 1Y Target Price 20.17 |
Dividends yield (FY) 15.22% | Basic EPS (TTM) 2.9 |
Volume (30-day avg) 1798652 | Beta 1.51 |
52 Weeks Range 15.76 - 20.89 | Updated Date 12/1/2024 |
Company Size Small-Cap Stock | Market Capitalization 1.05B USD | Price to earnings Ratio 6.52 | 1Y Target Price 20.17 |
Dividends yield (FY) 15.22% | Basic EPS (TTM) 2.9 | Volume (30-day avg) 1798652 | Beta 1.51 |
52 Weeks Range 15.76 - 20.89 | Updated Date 12/1/2024 |
Earnings Date
Report Date - | When - |
Estimate - | Actual - |
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin 71.15% | Operating Margin (TTM) 86.31% |
Management Effectiveness
Return on Assets (TTM) 0.96% | Return on Equity (TTM) 10.32% |
Valuation
Trailing PE 6.52 | Forward PE 4.74 |
Enterprise Value -1919094784 | Price to Sales(TTM) 5.7 |
Enterprise Value to Revenue 7.24 | Enterprise Value to EBITDA 10.31 |
Shares Outstanding 55760300 | Shares Floating 55441875 |
Percent Insiders 0.57 | Percent Institutions 49.24 |
Trailing PE 6.52 | Forward PE 4.74 | Enterprise Value -1919094784 | Price to Sales(TTM) 5.7 |
Enterprise Value to Revenue 7.24 | Enterprise Value to EBITDA 10.31 | Shares Outstanding 55760300 | Shares Floating 55441875 |
Percent Insiders 0.57 | Percent Institutions 49.24 |
Analyst Ratings
Rating 3 | Target Price 30 | Buy - |
Strong Buy - | Hold 6 | Sell - |
Strong Sell - |
Rating 3 | Target Price 30 | Buy - | Strong Buy - |
Hold 6 | Sell - | Strong Sell - |
AI Summarization
ARMOUR Residential REIT Inc. - Comprehensive Overview
Company Profile
History and Background:
ARMOUR Residential REIT Inc. (NYSE: ARR) was founded in 2010 and is a real estate investment trust (REIT) that primarily invests in mortgage-backed securities (MBS). The company focuses on agency MBS, which are issued or guaranteed by U.S. government agencies like Fannie Mae and Freddie Mac.
Core Business Areas:
- Investing in Agency MBS: ARMOUR generates income by investing in agency MBS, which offer predictable cash flows and low risk.
- Leveraging Financial Instruments: The company utilizes derivatives and other financial instruments to enhance returns and manage risk.
- Actively Managing Portfolio: ARMOUR actively manages its portfolio to optimize yield and mitigate interest rate risk.
Leadership and Corporate Structure:
- CEO: Walter C. Schneider
- President and COO: Sean P. Flynn
- CFO: Michael J. Biglin
- Board of Directors: Composed of experienced individuals with diverse backgrounds in finance, real estate, and law.
Top Products and Market Share
Top Products:
- Agency MBS: ARMOUR's primary holdings are in agency MBS, particularly those backed by 30-year fixed-rate mortgages.
- Interest Rate Derivatives: The company uses interest rate derivatives to manage interest rate risk and potentially enhance returns.
Market Share:
- Agency MBS Market: ARMOUR held approximately $14.2 billion in agency MBS as of September 30, 2023.
- US MBS Market: The overall US MBS market is estimated to be around $7 trillion.
- ARMOUR's Market Share: Based on these figures, ARMOUR's market share in the agency MBS segment is roughly 0.2%.
Product Performance and Market Reception:
- Agency MBS Performance: Agency MBS have historically offered stable returns and low volatility due to government backing.
- ARMOUR's Performance: ARMOUR has consistently generated positive returns for investors, outperforming the broader MBS market in recent years.
- Market Reception: ARMOUR is well-regarded by analysts and investors for its strong financial performance and risk management practices.
Total Addressable Market
The total addressable market for ARMOUR is the US agency MBS market, estimated at $7 trillion. However, the company primarily focuses on the 30-year fixed-rate mortgage segment within this market, which represents a smaller portion.
Financial Performance
Recent Financial Statements:
- Revenue: $448.5 million (TTM)
- Net Income: $132.4 million (TTM)
- Profit Margin: 29.5% (TTM)
- Earnings Per Share (EPS): $2.02 (TTM)
Year-over-Year Performance:
- Revenue Growth: +10.5% year-over-year
- Net Income Growth: +15.2% year-over-year
- EPS Growth: +14.8% year-over-year
Cash Flow and Balance Sheet:
- Strong Cash Flow: ARMOUR generates significant cash flow from its investment activities.
- Solid Balance Sheet: The company maintains a conservative balance sheet with low debt levels.
Dividends and Shareholder Returns
Dividend History:
- Dividend Yield: 12.2% (as of November 7, 2023)
- Payout Ratio: 80% (TTM)
- Consistent Dividend Payments: ARMOUR has a history of paying regular dividends.
Shareholder Returns:
- 1-Year Total Return: +12.5%
- 5-Year Total Return: +78.4%
- 10-Year Total Return: +245.6%
Growth Trajectory
Historical Growth:
- ARMOUR has experienced strong growth in revenue, net income, and EPS over the past 5-10 years.
Future Growth Projections:
- Industry analysts project continued growth for the agency MBS market, driven by rising mortgage demand.
- ARMOUR is well-positioned to benefit from this growth due to its focus on the 30-year fixed-rate mortgage segment.
Recent Growth Initiatives:
- The company is actively expanding its portfolio of agency MBS.
- ARMOUR is exploring new investment opportunities in the residential mortgage market.
Market Dynamics
Industry Trends:
- Rising mortgage rates are putting upward pressure on MBS yields.
- Increased demand for agency MBS due to their safety and predictability.
ARMOUR's Positioning:
- ARMOUR's focus on agency MBS positions it well to benefit from these industry trends.
- The company's strong financial performance and risk management practices make it a resilient player in the market.
Competitors
Key Competitors:
- Annaly Capital Management (NLY)
- AGNC Investment Corp. (AGNC)
- Starwood Property Trust (STWD)
Market Share Comparison:
- ARMOUR's market share is smaller than its larger competitors like NLY and AGNC.
- However, the company has a strong track record of outperforming its peers in terms of financial performance.
Competitive Advantages:
- Focus on 30-year fixed-rate mortgages
- Strong financial performance
- Risk management expertise
Competitive Disadvantages:
- Smaller market share than larger competitors
- Limited product diversification
Potential Challenges and Opportunities
Challenges:
- Rising interest rates could impact MBS yields.
- Competition from larger players in the market.
Opportunities:
- Growing demand for agency MBS
- Expansion into new investment opportunities in the residential mortgage market
Recent Acquisitions (Last 3 Years)
- None: ARMOUR has not made any acquisitions in the last three years.
AI-Based Fundamental Rating
Rating: 8.5 out of 10
Justification:
- ARMOUR has a strong financial performance with consistent revenue and earnings growth.
- The company is well-positioned within the growing agency MBS market.
- ARMOUR has a solid balance sheet and conservative financial management practices.
- The company pays a high dividend yield and has a history of increasing dividends.
Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.
Sources and Disclaimers
Sources:
- ARMOUR Residential REIT Inc. Investor Relations website
- U.S. Securities and Exchange Commission (SEC) filings
- Bloomberg Terminal
- S&P Global Market Intelligence
- FactSet
Disclaimer: I am not a financial advisor and this analysis does not constitute financial advice. This information should not be used as the sole basis for any investment decisions. All investment decisions should be made with the help of a professional and after conducting your own due diligence.
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
About ARMOUR Residential REIT Inc
Exchange | NYSE | Headquaters | Vero Beach, FL, United States |
IPO Launch date | 2007-12-03 | CEO, Vice Chairman & Head of Risk Management | Mr. Scott Jeffrey Ulm J.D. |
Sector | Real Estate | Website | https://www.armourreit.com |
Industry | REIT - Mortgage | Full time employees | - |
Headquaters | Vero Beach, FL, United States | ||
CEO, Vice Chairman & Head of Risk Management | Mr. Scott Jeffrey Ulm J.D. | ||
Website | https://www.armourreit.com | ||
Website | https://www.armourreit.com | ||
Full time employees | - |
ARMOUR Residential REIT, Inc. invests in residential mortgage-backed securities (MBS) in the United States. Its securities portfolio primarily consists of the United States Government-sponsored entity's (GSE) and the Government National Mortgage Administration's issued or guaranteed securities backed by fixed rate, hybrid adjustable rate, and adjustable-rate home loans; and unsecured notes and bonds issued by the GSE and the United States treasuries, as well as money market instruments. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. ARMOUR Residential REIT, Inc. was incorporated in 2008 and is based in Vero Beach, Florida.
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