DB:2AR1

Stock Analysis Report

Executive Summary

ARMOUR Residential REIT, Inc. invests in residential mortgage backed securities in the United States.


Snowflake Analysis

High growth potential second-rate dividend payer.


Similar Companies

Share Price & News

How has ARMOUR Residential REIT's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 2AR1's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

20.6%

2AR1

16.9%

DE Mortgage REITs

7.2%

DE Market


1 Year Return

-44.7%

2AR1

-47.9%

DE Mortgage REITs

-17.5%

DE Market

Return vs Industry: 2AR1 exceeded the German Mortgage REITs industry which returned -50.1% over the past year.

Return vs Market: 2AR1 underperformed the German Market which returned -14.1% over the past year.


Shareholder returns

2AR1IndustryMarket
7 Day20.6%16.9%7.2%
30 Day-46.7%-47.0%-22.3%
90 Day-38.9%-49.4%-26.1%
1 Year-37.7%-44.7%-43.0%-47.9%-14.9%-17.5%
3 Year-36.8%-53.9%-31.5%-49.7%-18.7%-25.7%
5 Year-22.8%-58.5%-16.0%-51.0%-17.8%-29.1%

Price Volatility Vs. Market

How volatile is ARMOUR Residential REIT's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is ARMOUR Residential REIT undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 2AR1 (€9.65) is trading below our estimate of fair value (€21.37)

Significantly Below Fair Value: 2AR1 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 2AR1 is unprofitable, so we can't compare its PE Ratio to the Mortgage REITs industry average.

PE vs Market: 2AR1 is unprofitable, so we can't compare its PE Ratio to the German market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 2AR1's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 2AR1 is overvalued based on its PB Ratio (0.5x) compared to the XX Mortgage REITs industry average (0.4x).


Next Steps

Future Growth

How is ARMOUR Residential REIT forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

95.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2AR1 is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (-0.4%).

Earnings vs Market: 2AR1 is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: 2AR1's is expected to become profitable in the next 3 years.

Revenue vs Market: 2AR1's revenue (101.5% per year) is forecast to grow faster than the German market (4% per year).

High Growth Revenue: 2AR1's revenue (101.5% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2AR1's Return on Equity is forecast to be low in 3 years time (11.2%).


Next Steps

Past Performance

How has ARMOUR Residential REIT performed over the past 5 years?

-5.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2AR1 is currently unprofitable.

Growing Profit Margin: 2AR1 is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: 2AR1 is unprofitable, and losses have increased over the past 5 years at a rate of -5.4% per year.

Accelerating Growth: Unable to compare 2AR1's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: 2AR1 is unprofitable, making it difficult to compare its past year earnings growth to the Mortgage REITs industry (14.3%).


Return on Equity

High ROE: 2AR1 has a negative Return on Equity (-17.39%), as it is currently unprofitable.


Next Steps

Financial Health

How is ARMOUR Residential REIT's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: 2AR1 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 2AR1's debt is not covered by short term assets (assets are 0.1x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: 2AR1 has sufficient cash runway for more than 3 years based on its current free cash flow.

Forecast Cash Runway: 2AR1 has sufficient cash runway for 2.8 years if free cash flow continues to reduce at historical rates of -38.4% each year.


Financial Institutions Analysis

Asset Level: 2AR1's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if 2AR1 has a sufficient allowance for bad loans.

Low Risk Liabilities: 2AR1 reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if 2AR1 has an acceptable proportion of non-loan assets held.

Low Risk Deposits: 2AR1 has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if 2AR1 has an appropriate level of bad loans.


Next Steps

Dividend

What is ARMOUR Residential REIT's current dividend yield, its reliability and sustainability?

18.46%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 2AR1's dividend (18.46%) is higher than the bottom 25% of dividend payers in the German market (1.66%).

High Dividend: 2AR1's dividend (18.46%) is in the top 25% of dividend payers in the German market (4.86%)


Stability and Growth of Payments

Stable Dividend: 2AR1's dividend payments have been volatile in the past 10 years.

Growing Dividend: 2AR1's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: 2AR1 is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: 2AR1's dividends in 3 years are forecast to be covered by earnings (88.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

7.5yrs

Average management tenure


CEO

Jeff Zimmer (62yo)

10.33s

Tenure

US$806,420

Compensation

Mr. Jeffrey J. Zimmer, also known as Jeff, serves as Co-Chief Executive Officer, President of ARMOUR Residential REIT, Inc. since November 2009 Mr. Zimmer has been Co-Chief Executive Officer and President  ...


Leadership Team

NamePositionTenureCompensationOwnership
Jeffrey Zimmer
Co-CEO, Co-Vice Chairman & President10.33yrsUS$806.42k0.27% $1.7m
Scott Ulm
Co-CEO, Co-Vice Chairman & Chief Risk Officer10.33yrsUS$806.42k0.25% $1.5m
James Mountain
CFO & Secretary7.5yrsUS$398.88k0.11% $643.6k
Mark Gruber
COO & Chief Investment Officer6.5yrsUS$398.88k0.085% $519.6k
Gordon Harper
VP of Finance0.083yrUS$133.57k0.025% $150.1k

7.5yrs

Average Tenure

60yo

Average Age

Experienced Management: 2AR1's management team is seasoned and experienced (7.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jeffrey Zimmer
Co-CEO, Co-Vice Chairman & President10.33yrsUS$806.42k0.27% $1.7m
Scott Ulm
Co-CEO, Co-Vice Chairman & Chief Risk Officer10.33yrsUS$806.42k0.25% $1.5m
Marc Bell
Director10.33yrsUS$216.88k0.026% $160.9k
Daniel Staton
Non-Executive Chairman10.33yrsUS$251.88k0.50% $3.1m
Stewart Paperin
Independent Director10.33yrsUS$372.47k0.059% $363.2k
Robert Hain
Independent Director10.33yrsUS$352.86k0.0080% $48.7k
John Hollihan
Independent Director10.33yrsUS$357.37k0.072% $440.6k
Carolyn Downey
Independent Director6.5yrsUS$296.09k0.045% $273.0k
Z. Jamie Behar
Independent Director0.67yrno data0.017% $106.5k
Thomas Guba
Lead Independent Director6yrsUS$337.47k0.10% $617.4k

10.3yrs

Average Tenure

66yo

Average Age

Experienced Board: 2AR1's board of directors are seasoned and experienced ( 10.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 2AR1 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 37.3%.


Top Shareholders

Company Information

ARMOUR Residential REIT, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ARMOUR Residential REIT, Inc.
  • Ticker: 2AR1
  • Exchange: DB
  • Founded: 2008
  • Industry: Mortgage REITs
  • Sector: Diversified Financials
  • Market Cap: US$677.684m
  • Listing Market Cap: US$611.203m
  • Shares outstanding: 58.88m
  • Website: https://www.armourreit.com

Location

  • ARMOUR Residential REIT, Inc.
  • 3001 Ocean Drive
  • Suite 201
  • Vero Beach
  • Florida
  • 32963
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ARRNYSE (New York Stock Exchange)YesCommon StockUSUSDNov 2009
2AR1DB (Deutsche Boerse AG)YesCommon StockDEEURNov 2009
0HHULSE (London Stock Exchange)YesCommon StockGBUSDNov 2009
2AR1BRSE (Berne Stock Exchange)YesCommon StockCHCHFNov 2009
ARR.PRCNYSE (New York Stock Exchange)7% CUM PFD CUSUSDJan 2020

Biography

ARMOUR Residential REIT, Inc. invests in residential mortgage backed securities in the United States. The company’s 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, as well as unsecured notes and bonds issued by the GSE and the United States treasuries; and money market instruments. It also invests in other securities backed by residential mortgages for which the payment of principal and interest is not guaranteed by a GSE or government agency. The company has elected to be taxed as a real estate investment trust under the Internal Revenue Code. 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 founded in 2008 and is based in Vero Beach, Florida. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/27 22:12
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.