Source: https://arbor.com/
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For today’s REIT post, I am taking a look at Arbor Realty Trust Inc. (NYSE: ABR). It’s a REIT which I once owned, but no longer, due to trimming of my portfolio due to being overdiversified in the Real Estate sector.
With that being said, it’s a company I do like and first, let’s get to learn more about Arbor Realty Trust Inc.
A history of the company (from the official website):
For close to 25 years, Uniondale, NY-based Arbor Realty Trust, Inc. (NYSE: ABR) has helped multifamily and commercial real estate clients achieve their financial goals by focusing on growing long-term relationships and conducting business as not simply another real estate lender, but as a partner. We value our clients to such an extent that we’re more comfortable calling them partners, and their relationships with Arbor are the foundation of our business.
The REIT currently has a closing price (as of July 4th) at $17.77 and has a market cap of $2.5 billion and outstanding shares of $142.3 million with 41% shares held by institutions.
CFRA gives the rating as a recommended “Strong Buy” with a positive for valuation, growth and price momentum, while having a neutral at quality and street sentiment.
Among its peers, of all Mortgage Trust REITs, the CFRA only gave “Strong Buy” to Arbor Realty Trust, Inc. While the others were Chimera Investment Corporation and Two Harbors Investment Corp.
Credit Suiise has mortgage reits set to “Outperform”, Returers Research Average Rating of “Hold” and Market Edge Second Opinion Weekly set at “Long”.
Looking at the company’s growth, there is no doubt that the company started strong from 2005-2007 and as expected, like many mortgage companies, took a steep drop during the Real Estate market crash of 2007-2008 and took a few years to start its new normal at over $5 and saw growth in 2018 as it surpassed $10 and then surpassed $15 in 2020, to experience another major drop due to the pandemic.
But Arbor Realty Trust Inc. surpassed its $10, then its $15 and nearly reached $20, which it hasn’t reached since 2007.
So, right now in terms of growth, things are looking good for Arbor Realty Trust Inc.
The company issues a $.34 quarterly dividend ($1.36 annually) and has a 7.65% annual dividend yield.
Even better, the Earnings Per Share is $2.12 which is a positive and Price/Earnings is $8.36 and Forward P/E is $9.34. So, the company is making money.
A dividend has been paid annually and has increased each year including during the 2020 pandemic.
Among its peers, Arbor Realty Trust Inc. pays the second highest dividend, with PennyMac Mortgage Investment Trust paying $1.88 annually and an 8.97% annual dividend yield. But where Arbor Realty Trust Inc. has increased year after year since 2012, PennyMac dropped.
So, for now it seems that Arbor Realty Trust Inc., things are looking positive. In March, the company issued 7 million new shares of common stock at premium to book value. And then in May, the company announced the pricing of $8 million shares of 6.375% Series D Cumulative Redeemable Preferred stock and use the proceeds for the redemption of outstanding preferred stock. Which the company did in late May, with the redemption of Series A, Series B and Series C Cumulative Redeemable Preferred stocks.
Needless to say, what I liked about ABR is how it showed resilience during the pandemic and to see it grow.
So, I do like what I see so far.
As always, perform your due diligence and do a lot of research before investing. Talk to a financial advisor and find out if Arbor Realty Trust Inc. (NYSE: ABR) would be a perfect investment for you.
