Angel Oak Mortgage REIT, Inc. (NYSE: AOMR)

Sector: Real Estate Industry: REIT - Mortgage CIK: 0001766478
Market Cap 218.63 Mn
P/B 0.94
P/E -2.29
P/S -3.24
ROIC (Qtr) 0.90
Div Yield % 19.44
Rev 1y % (Qtr) -60.63
Total Debt (Qtr) 2.21 Bn
Debt/Equity (Qtr) 8.37

About

Angel Oak Mortgage REIT, Inc. (AOMR) operates in the real estate finance industry, focusing on acquiring and investing in first lien non-QM loans and other mortgage-related assets in the U.S. mortgage market. The company is externally managed by Falcons I, LLC, an affiliate of Angel Oak Capital, a leading alternative credit manager. Angel Oak Mortgage REIT's primary business activities involve making credit-sensitive investments, primarily in newly-originated first lien non-QM loans. These loans are underwritten to less stringent guidelines than...

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Price action

Investment thesis

Bull case

  • Strong free cash flow of (379.51M) provides 211.07x coverage of acquisition spending (1.80M), indicating disciplined M&A strategy.
  • Free cash flow of (379.51M) provides excellent 12.45x coverage of dividends (30.49M), indicating sustainable shareholder returns.
  • Cash reserves of 53.43M provide comfortable 327.80x coverage of tax obligations 163000, showing strong fiscal management.

Bear case

  • Operating cash flow of (379.51M) barely covers its investment activities of 55.68M, with a coverage ratio of -6.82, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 53.43M provide limited coverage of acquisition spending of (1.80M), which is -29.72x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of (379.51M) shows concerning coverage of stock compensation expenses of 1.11M, with a -342.82 ratio indicating potential earnings quality issues.
  • Operating cash flow of (379.51M) provides minimal -1236.18x coverage of tax expenses of 307000, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Free cash flow of (379.51M) represents just -1.08x of debt issuance 351.52M, suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the REIT - Mortgage
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 RITM Rithm Capital Corp. 5.56 Bn 7.15 1.12 34.97 Bn
2 STWD Starwood Property Trust, Inc. 5.05 Bn 11.75 4.20 21.43 Bn
3 AGNC AGNC Investment Corp. 4.13 Bn 1.40 1.31 95.01 Bn
4 NLY Annaly Capital Management Inc 3.69 Bn 2.21 1.94 107.02 Bn
5 LADR Ladder Capital Corp 1.29 Bn 20.14 6.00 3.51 Bn
6 MFA Mfa Financial, Inc. 0.89 Bn 3.03 2.45 9.84 Bn
7 CIM Chimera Investment Corp 0.84 Bn 8.08 1.54 12.22 Bn
8 BRSP BrightSpire Capital, Inc. 0.75 Bn -1.47 2.08 2.17 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.78 0.56
EV to Cash from Ops. EV/CFO 3.44 45.88
EV to Debt EV to Debt 0.93 0.87
EV to EBIT EV/EBIT -21.74 187.98
EV to EBITDA EV/EBITDA -22.46 120.37
EV to Free Cash Flow [EV/FCF] EV/FCF 3.44 56.42
EV to Market Cap EV to Market Cap 9.40 25.15
EV to Revenue EV/Rev -30.46 56.50
Price to Book Value [P/B] P/B 0.94 0.71
Price to Earnings [P/E] P/E -2.29 4.95
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.58 -0.57
Dividend Payout Ratio % Div Payout % (Qtr) 162.00 33.95
Dividend per Basic Share Div per Share (Qtr) 1.28 1.18
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -7.77 52.50
Interest Coverage Interest Coverage 0.00 -0.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % 0.00 34.54
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 19.45 21.41
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 4.93
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -75.62 14.33
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -71.70 7.56
EBIT Growth (1y) % EBIT 1y % (Qtr) -76.41 17.27
EBT Growth (1y) % EBT 1y % (Qtr) -76.41 7.46
EPS Growth (1y) % EPS 1y % (Qtr) -73.49 41.90
FCF Growth (1y) % FCF 1y % (Qtr) -55.71 60.56
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -67.42 16.78
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.01 0.04
Cash Payout Ratio Cash Payout (Qtr) -0.08 0.90
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 8.37 5.05
Interest Cover Ratio Interest Cover Ratio 0.00 -0.17
Times Interest Earned Times Interest Earned 0.00 -0.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 51.70 136.11
EBIT Margin % EBIT Margin % (Qtr) 51.75 141.14
EBT Margin % EBT Margin % (Qtr) 51.75 128.11
Gross Margin % Gross Margin % (Qtr) 80.40 114.71
Net Profit Margin % Net Margin % (Qtr) 50.90 124.85