Daily Stock Analysis: Arbor Realty Trust (ABR)

Arbor Realty Trust Inc., known by the ticker symbol ABR, is a mid cap real estate in investment trust in the financial services business sector. This is my first report on ABR for my Viital stock portfolio. I have not reviewed ABR since February 26, 2021, when I selected it as my twenty-fifth pick for my Vista Portfolio (my  6th of seven folios so-far).

Arbor Realty Trust Inc. is a specialized real estate finance company. 

Gray High Rise Buildings
Image Source: Pexels

It invests in a diversified portfolio of structured finance assets in the multifamily and commercial real estate markets, primarily consisting of bridge and mezzanine loans, including junior participating interests in first mortgages, preferred and direct equity. 

In addition, it may also directly acquire real property and invest in real estate-related notes and certain mortgage-related securities. 

The company has two business segments, Structured Business and Agency Business. It generates a majority of its revenue from the Structured Business Segment. The company is externally managed and advised by Arbor Commercial Mortgage, LLC.

The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.

The company was incorporated in 2003 and is headquartered in Uniondale, New York.

Three key data points gauge any dividend equity or fund such as Arbor Realty Trust Inc. (ABR):

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money. 

ABR Price

Arbor's price per share was $17.10 as of Friday's market close. One year ago its price was $6.93 Thus, Arbor's share price rose over 59% in the past year.

If Arbor's stock trades in the range of $12.00 to $25.00 this next year, its recent $17.10 share price might rise by $4.40 to reach $21.50 by December 20, 2022. My estimate is $0.38 lower than the median annual 1yr price target from 4 brokerage analysts tracking ABR for brokerages

ABR Dividends

Arbor's most recent quarterly dividend of  $0.36 was paid out on November 30th, to shareholders of record on November 12th. That dividend, multiplied by four equates to $1.44 annually and yields 8.42% per yesterday's $17.10 closing price. 

Arbor Realty Trust Inc. has paid quarterly dividends increasing annually since May 2012. That will be 10 years come May.

ABR Returns

Adding the $1.44 annual estimated Arbor Realty Trust Inc forward-looking dividend to my $4.40 price upside estimate shows a $5.84 potential gross gain, per share, to be reduced by any costs to trade ABR shares.  

At yesterday's $17.10 price per share, a little under $1000 would buy 58 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at sale and might cost us about $0.17 per share.

Subtract that maybe $0.17 brokerage cost from my estimated $5.84 gross gain per share results in a net gain of $5.67 X 58 shares = $328.86 for a 32.9% net gain on a $991.80  investment.

So it is that Arbor Realty Trust Inc. shows a possible 32.9% net gain including an 8.42% forward estimated dividend yield. 

Over the next year at this time, a $1000 investment in Arbor Realty Trust Inc. could generate $84.20 in cash dividends alone. Note that a single share of ABR stock bought at yesterday's closing price was $17.10. Therefore, ABR's share price is nearly five times under the dividend income from $1000.00 invested. Thus, according to my dogcatcher ideal, now is a prime time to pick up Arbor Realty Trust Inc. shares. The estimated next-year dividend from $1K invested is over 4.9 times Arbor's single share price. Consider yourself alerted. It's a sign!  

All of the estimates above are speculation based on the past history of Arbor Realty Trust Inc. Only time and money invested in this stock will determine its market value.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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Mike Nolan 2 years ago Member's comment

$ABR is internally managed ( NOT externally).