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

Sector: Real Estate Industry: REIT - Mortgage CIK: 0001766478
Market Cap 193.95 Mn
P/B 0.73
P/E 10.99
P/S 5.59
ROIC (Qtr) 0.90
Div Yield % 18.43
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 NLY Annaly Capital Management Inc 13.98 Bn 10.42 8.17 107.02 Bn
2 AGNC AGNC Investment Corp. 11.44 Bn 16.65 30.74 95.01 Bn
3 STWD Starwood Property Trust, Inc. 6.55 Bn 17.88 3.63 21.43 Bn
4 RITM Rithm Capital Corp. 5.78 Bn 7.43 1.16 34.97 Bn
5 BXMT Blackstone Mortgage Trust, Inc. 3.36 Bn 31.37 6.62 15.46 Bn
6 ARR Armour Residential REIT, Inc. 1.83 Bn 34.78 15.64 16.56 Bn
7 DX Dynex Capital Inc 1.59 Bn 9.04 6.88 11.75 Bn
8 ABR Arbor Realty Trust Inc 1.50 Bn 9.84 2.84 10.40 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.83 0.83
EV to Cash from Ops. EV/CFO -5.77 -102.96
EV to Debt EV to Debt 0.99 1.31
EV to EBIT EV/EBIT 122.01 -260.73
EV to EBITDA EV/EBITDA 99.42 -16.37
EV to Free Cash Flow [EV/FCF] EV/FCF -5.77 3.47
EV to Market Cap EV to Market Cap 11.39 9.18
EV to Revenue EV/Rev 63.14 26.77
Price to Book Value [P/B] P/B 0.73 0.68
Price to Earnings [P/E] P/E 10.90 -4.85
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.58 -0.55
Dividend Payout Ratio % Div Payout % (Qtr) 162.00 29.47
Dividend per Basic Share Div per Share (Qtr) 1.28 1.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -7.77 57.60
Interest Coverage Interest Coverage 0.00 -0.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % 0.00 37.60
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 19.45 24.22
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 4.53
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -75.62 17.83
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -71.70 9.86
EBIT Growth (1y) % EBIT 1y % (Qtr) -76.41 20.98
EBT Growth (1y) % EBT 1y % (Qtr) -76.41 11.17
EPS Growth (1y) % EPS 1y % (Qtr) -73.49 59.25
FCF Growth (1y) % FCF 1y % (Qtr) -55.71 59.63
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -67.42 20.65
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 0.83
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) 51.70 137.11
EBIT Margin % EBIT Margin % (Qtr) 51.75 142.19
EBT Margin % EBT Margin % (Qtr) 51.75 129.16
Gross Margin % Gross Margin % (Qtr) 80.40 117.97
Net Profit Margin % Net Margin % (Qtr) 50.90 125.89