American Finance Trust (NASDAQ:AFIN) and CIM Commercial Trust (NASDAQ:CMCT) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.
American Finance Trust pays an annual dividend of $0.85 per share and has a dividend yield of 10.1%. CIM Commercial Trust pays an annual dividend of $0.30 per share and has a dividend yield of 4.2%. American Finance Trust pays out -283.3% of its earnings in the form of a dividend. CIM Commercial Trust pays out -19.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. American Finance Trust has increased its dividend for 2 consecutive years and CIM Commercial Trust has increased its dividend for 1 consecutive years. American Finance Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
American Finance Trust has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500. Comparatively, CIM Commercial Trust has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.
Earnings & Valuation
This table compares American Finance Trust and CIM Commercial Trust’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|American Finance Trust||$305.22 million||3.40||-$31.86 million||($0.30)||-28.00|
|CIM Commercial Trust||$77.21 million||2.18||-$15.02 million||($1.57)||-4.59|
CIM Commercial Trust has lower revenue, but higher earnings than American Finance Trust. American Finance Trust is trading at a lower price-to-earnings ratio than CIM Commercial Trust, indicating that it is currently the more affordable of the two stocks.
This table compares American Finance Trust and CIM Commercial Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|American Finance Trust||-3.18%||-0.61%||-0.29%|
|CIM Commercial Trust||-7.06%||-13.08%||-0.86%|
Institutional & Insider Ownership
53.0% of American Finance Trust shares are held by institutional investors. Comparatively, 65.2% of CIM Commercial Trust shares are held by institutional investors. 0.5% of American Finance Trust shares are held by company insiders. Comparatively, 41.2% of CIM Commercial Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a summary of current ratings and price targets for American Finance Trust and CIM Commercial Trust, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|American Finance Trust||0||2||1||0||2.33|
|CIM Commercial Trust||0||0||1||0||3.00|
American Finance Trust currently has a consensus price target of $11.33, indicating a potential upside of 34.92%. CIM Commercial Trust has a consensus price target of $13.00, indicating a potential upside of 80.31%. Given CIM Commercial Trust’s stronger consensus rating and higher probable upside, analysts plainly believe CIM Commercial Trust is more favorable than American Finance Trust.
American Finance Trust beats CIM Commercial Trust on 10 of the 16 factors compared between the two stocks.
About American Finance Trust
American Finance Trust, Inc. is a real estate investment trust, which engages in the acquiring and managing a portfolio of primarily service-oriented and traditional retail and distribution related commercial real estate properties. It operates through income-producing properties segment, which consists of activities related to investing in real estate. The company was founded on January 22, 2013 and is headquartered in New York, NY.
About CIM Commercial Trust
CIM Commercial Trust Corp. engages in the acquisition, ownership, and operation of Class A and office assets. It operates through the following segments: Office, Hotel, and Lending. The Office segment consists of rental of office space and other tenant services, including tenant reimbursements, parking, and storage space rental. The Hotel segment relates to operations of hotel properties and rental income generated from a garage located directly across the street from one of the hotels. The Lending segment includes income from the yield and other related fee income earned on its loans receivable. The company was founded in 1979 and is headquartered in Dallas, TX.
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