What does interest coverage mean?

How many times the company's operating profit covers its interest bill.

How do you interpret interest coverage?

Higher is safer; below ~2× is a warning that earnings provide little cushion against the debt burden. Debt-free companies have no interest expense and the ratio is left blank.

How does interest coverage compare across companies?

Comparable across leveraged non-financials; less relevant for net-cash companies with negligible interest.

Angel Oak Mortgage AOMR Interest coverage

Interest coverage at other companies

Redwood TrustRWT

0.9×—

Annaly Capital ManagementNLY

1.4×+0.3×

Starwood Property TrustSTWD

1.3×0.0×

Granite Point Mortgage TrustGPMT

0.6×+0.6×

EFC

Ellington Financial Inc.EFC

1.5×+0.1×

PennyMac Mortgage Investment TrustPMT

1.1×0.0×

Other financials

Income statement

See full

Revenue$40.7M+23.8%

Net income-$7.4M-136%

EPS (diluted)-$0.30-134%

Balance sheet

See full

Cash & equivalents$43.6M+0.4%

Total debt$2.4B—

Total equity$256.9M+2.2%

Total assets$2.8B+5.0%

Cash flow

See full

Operating cash flow-$143.7M+28.8%

Valuation

See full

Market cap$210.53M-8.6%

Enterprise value$2.59B—

P/E13.1×—

P/S1.4×-0.6×

Profitability

See full

Net margin10.6%—

Returns & leverage

See full

Return on equity6.3%—

Debt / equity9.4×—

Questions, answered.

What does interest coverage mean?: How many times the company's operating profit covers its interest bill.
How do you interpret interest coverage?: Higher is safer; below ~2× is a warning that earnings provide little cushion against the debt burden. Debt-free companies have no interest expense and the ratio is left blank.
How does interest coverage compare across companies?: Comparable across leveraged non-financials; less relevant for net-cash companies with negligible interest.