Apollo Commercial: Solid Dividend Coverage Turns This CRE Trust Into A Buy (Upgrade)

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Summary

  • Lower interest rates in 2024 could boost Apollo Commercial Real Estate Finance's loan origination business and result in higher distributable earnings.
  • Despite a decline in portfolio value and high dividend risks, Apollo Commercial Real Estate Finance may be able to maintain its dividend without cutting it.
  • The trust's stock has been sold at a discount due to office exposure, but lower interest rates could revive its loan origination business and slow loan repayments.
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EschCollection

The mortgage loan origination business could receive new impulses from lower interest rates in 2024 which is why I modify my stock classification for Apollo Commercial Real Estate Finance Inc. (NYSE:ARI) from Hold to Buy. I think that the central bank

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A financial researcher and avid investor with a keen eye for innovation and disruption, as well as growth buy-outs and value stocks. Keeping an eye on the pace of high tech and early growth companies, I write about current events and the biggest news surrounding the industry, and strive to provide readers with ample research and investment opportunities.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of ARI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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