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ARMOUR Residential REIT Inc (ARR)
NYSE:ARR
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ARMOUR Residential REIT
(NYSE:ARR)
45Neutral
ARMOUR Residential REIT (ARR) vs. S&P 500 (SPY)
Market Cap
$1.13B
Dividend Yield20.35%
Average Volume (3M)3.39M
Price to Earnings (P/E)8.0
Beta (1Y)1.10
Revenue Growth-46.65%
EPS Growth76.86%
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength70
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)-0.44
Shares Outstanding79,968,020
10 Day Avg. Volume4,064,863
30 Day Avg. Volume3,392,485
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)214.54
Price to Cash Flow (P/CF)3.90
P/FCF Ratio0.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$19.00Price Target Upside34.85% Upside
Rating ConsensusHold
Number of Analyst Covering2
ARMOUR Residential REIT Business Overview & Revenue Model
Company DescriptionARMOUR Residential REIT, Inc. (ARR) is a real estate investment trust that primarily invests in residential mortgage-backed securities (MBS) in the United States. The company is focused on managing a portfolio of agency MBS issued or guaranteed by U.S. Government-sponsored entities such as Fannie Mae, Freddie Mac, and Ginnie Mae. ARMOUR Residential REIT's core services involve leveraging its expertise in mortgage securities to generate returns for its investors.
How the Company Makes MoneyARMOUR Residential REIT makes money through the management and investment in agency mortgage-backed securities (MBS). The company generates revenue by earning interest income on its MBS portfolio, which consists mostly of fixed-rate and adjustable-rate residential mortgage securities. ARMOUR Residential REIT profits from the spread between the yield on its MBS investments and the cost of borrowing funds to finance these investments. The company employs hedging strategies to manage interest rate risk and aims to optimize its portfolio to enhance returns while maintaining a stable risk profile. Key revenue streams for ARMOUR Residential REIT include interest income from its MBS holdings and gains from the sale of securities in its portfolio. Significant factors contributing to its earnings include the overall interest rate environment, the shape of the yield curve, and the company's ability to effectively hedge its interest rate exposure.
ARMOUR Residential REIT Financial Statement Overview
Summary
ARMOUR Residential REIT's financials present a mixed picture. The income statement is weak, with consistent losses and revenue volatility. The balance sheet has improved in terms of debt, yet historical leverage and large liabilities remain concerns. Cash flow performance is relatively stronger, but with potential risks in investments. Overall, while there are signs of improvement, significant challenges persist.Income Statement
The company has consistently struggled with profitability, reflected in negative net income over recent years. Revenue growth is volatile, with significant fluctuations, including a drop to zero in the latest period. This instability reflects challenges in the core business operations, leading to poor margins and a low score.28
Negative
Balance Sheet
The balance sheet shows a mixed picture with zero total debt recently, but high liabilities in previous years. The equity ratio has improved, indicating better capital structure management. However, historical high leverage poses a risk. The overall financial health has seen some improvement, but past instability dampens the score.45
Neutral
Cash Flow
Cash flow has shown some resilience, with positive free cash flow growth recently. Operating cash flow is strong compared to net income, indicating good cash conversion. However, the volatility in investing cash flow suggests potential fluctuations and risks. This mixed performance results in an average score.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| -478.00K | 449.67M | -225.87M | 19.17M | -22.21M | Gross Profit |
| -478.00K | 449.67M | -458.12M | -3.34M | -44.41M | EBIT |
| -1.02B | 0.00 | -121.12M | 15.36M | -215.11M | EBITDA |
| 0.00 | 457.87M | -104.61M | 7.11M | -151.13M | Net Income Common Stockholders |
| -14.39M | -67.92M | -241.91M | 3.89M | -224.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 67.97M | 11.70B | 87.28M | 338.00M | 5.35B | Total Assets |
| 13.55B | 12.34B | 9.44B | 5.28B | 5.52B | Total Debt |
| 0.00 | 9.65B | 6.46B | 3.95B | 4.54B | Net Debt |
| -67.97M | 9.39B | 6.38B | 3.61B | 4.37B | Total Liabilities |
| 12.19B | 11.07B | 8.32B | 4.00M | 4.20M | Stockholders Equity |
| 1.36B | 1.27B | 1.11B | 1.14B | 938.30M |
| Cash Flow | Free Cash Flow | |||
| 261.46M | 132.82M | 124.08M | 11.74M | -257.82M | Operating Cash Flow |
| 261.46M | 132.82M | 124.08M | 11.74M | -257.82M | Investing Cash Flow |
| -1.69B | -3.04B | -3.89B | 503.58M | 7.09B | Financing Cash Flow |
| 1.31B | 3.05B | 3.53B | -330.77M | -6.93B |
ARMOUR Residential REIT Technical Analysis
Negative
14.09
Price Trends
17.86
Negative
17.96
Negative
18.18
Negative
Market Momentum
-0.33
Positive
25.78
Positive
12.66
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARR, the sentiment is Negative. The current price of 14.09 is below the 20-day moving average (MA) of 16.85, below the 50-day MA of 17.86, and below the 200-day MA of 18.18, indicating a bearish trend. The MACD of -0.33 indicates Positive momentum. The RSI at 25.78 is Positive, neither overbought nor oversold. The STOCH value of 12.66 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARR.
ARMOUR Residential REIT Risk Analysis
ARMOUR Residential REIT disclosed 62 risk factors in its most recent earnings report. ARMOUR Residential REIT reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ARMOUR Residential REIT Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $1.10B | 9.00 | 9.45% | 13.53% | 11.91% | 52.26% | |
68 Neutral | $1.10B | 9.23 | 8.24% | 12.68% | -16.66% | -23.98% | |
65 Neutral | $1.07B | 7.47 | 11.08% | 15.09% | 139.84% | ― | |
62 Neutral | $1.12B | 4.52 | 13.74% | 16.79% | 28.33% | ― | |
61 Neutral | $4.21B | 15.62 | -3.65% | 12.27% | 6.29% | -21.37% | |
49 Neutral | $1.14B | ― | -6.02% | 13.40% | -9.71% | -426.57% | |
45 Neutral | $1.13B | 8.01 | -1.09% | 20.35% | -46.65% | 76.86% |
* Real Estate Sector Average
Performance Comparison
ARR
ARMOUR Residential REIT
14.09
-1.46
-9.39%
ARI
Apollo Real Estate
8.09
-1.31
-13.94%
DX
Dynex Capital
11.39
1.22
12.00%
EFC
Ellington Financial
11.60
1.86
19.10%
TWO
Two Harbors
10.70
0.39
3.78%
PMT
PennyMac Mortgage
12.19
0.34
2.87%
ARMOUR Residential REIT Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -23.59% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture for ARMOUR Residential REIT. While there were notable successes in capital raising, positive ROE outlook, and stable dividend payments, the significant GAAP net loss and concerns over GSE reforms and banking regulations highlight challenges. The sentiment is balanced with both positive and negative aspects.Highlights
Capital Raising Success
ARMOUR raised approximately $136.2 million through an aftermarket offering program in Q4 2024, and an additional $259 million through ATM programs up to February 2025.
Positive ROE Outlook
ARMOUR is experiencing some of the most attractive yields in its history, with a duration hedged levered ROE measure of 18% to 19% on production and premium coupon MBS.
Stable Dividend Payments
ARMOUR paid monthly common stock dividends of $0.24 per share, totaling $0.70 for the quarter, and aims to maintain an attractive and stable dividend.
Portfolio Liquidity and Diversification
The investment portfolio remains liquid with 100% agency MBS and is well diversified across the 30-year coupon stack, with cash and liquidity at approximately 50% of the total capital.
Lowlights
GAAP Net Loss
ARMOUR reported a Q4 GAAP net loss related to common stockholders of $49.4 million, or $0.83 per common share.
Book Value Decline
Quarter-end book value was reported at $19.07 per common share, with a slight increase to $19.18 as of February 10, 2025.
Challenges with GSE Reform and Banking Regulations
Potential GSE reforms and unclear banking regulations present ongoing uncertainty and potential risk to ARMOUR's market position and strategy.
Company Guidance
During the ARMOUR Residential REIT Fourth Quarter 2024 Earnings Conference Call, several key financial metrics and strategic insights were shared. The company reported a Q4 GAAP net loss of $49.4 million, or $0.83 per common share. Net interest income stood at $12.7 million, while distributable earnings available to common stockholders were $46.5 million, or $0.78 per common share. ARMOUR raised approximately $136.2 million in capital through the issuance of about 7.2 million shares, which was mildly dilutive at $0.02 per share. The quarter-end book value was $19.07 per common share, with an estimated book value of $19.18 as of February 10, 2025. ARMOUR paid monthly dividends of $0.24 per common share, totaling $0.70 for the quarter. The portfolio's positive yield curve and attractive MBS spreads are generating 150 basis points positive versus cash, with hedged levered ROE measures yielding 18% to 19%. The company also raised an additional $259 million through its ATM program, issuing 14 million common shares and 17,364 preferred C shares. ARMOUR's strategy includes maintaining a constructive view on agency MBS spreads and leveraging opportunities amidst market volatility, while also considering macroeconomic and geopolitical factors.ARMOUR Residential REIT Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
ARMOUR Residential REIT Updates Financial Position and Dividend
Neutral
Mar 13, 2025
On March 13, 2025, ARMOUR Residential REIT, Inc. released a presentation detailing updates on its financial position, business, and operations. The presentation highlighted key financial metrics, including a common stock price of $19.05, a debt-equity ratio of 7.1, and total liquidity of $854.4 million as of February 28, 2025. The company also announced a March 2025 common dividend of $0.24, with an ex-dividend date of March 17, 2025, and a pay date of March 27, 2025. ARMOUR’s portfolio primarily consists of mortgage-backed securities, with a significant portion in 30-year fixed-rate pools. The announcement provides insights into ARMOUR’s strategic focus on maintaining dividends and managing interest rate risks, impacting its operations and stakeholder interests.
DividendsBusiness Operations and StrategyFinancial Disclosures
ARMOUR Residential REIT Updates on Financial Position
Neutral
Feb 12, 2025
On February 12, 2025, ARMOUR Residential REIT, Inc. released a presentation updating stakeholders on its financial position and operations. The presentation highlighted key financial metrics, including a common stock price of $18.82, a debt-equity ratio of 6.7, and total liquidity of $760.4 million. ARMOUR’s portfolio, valued at $14.429 billion, is significantly invested in 30-year fixed-rate pools. The company declared a March 2025 common dividend of $0.24, with a pay date of March 27, 2025, reflecting its focus on stable dividend payouts. These updates provide insights into ARMOUR’s operational strategies and its positioning within the mortgage-backed securities market.
Financial Disclosures
ARMOUR Residential REIT to Host Q4 2024 Webcast
Neutral
Feb 11, 2025
On February 11, 2025, ARMOUR Residential REIT announced it will host a real-time webcast for equity analysts to discuss its fourth quarter 2024 operating results on February 13, 2025. The earnings release for this period will be issued after trading closes on February 12, 2025, with the webcast available online and for replay on the company’s website for one year.
DividendsBusiness Operations and StrategyFinancial Disclosures
ARMOUR Residential REIT Financial Update and Dividend Announcement
Neutral
Jan 17, 2025
On January 17, 2025, ARMOUR Residential REIT released a presentation detailing its financial position and operations as of December 31, 2024. The presentation highlighted key financial metrics, including a common stock price of $18.86, a leverage ratio of 8.0, and total liquidity of $608 million. ARMOUR’s portfolio primarily consists of 30-year fixed-rate pools, with a significant portion invested in government-backed securities. The company declared a January 2025 common dividend of $0.24, reflecting its focus on shareholder value and risk management. The update provides insights into ARMOUR’s strategy and positioning in the mortgage-backed securities market.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.