Head-To-Head Survey: Ares Commercial Real Estate Corporation (ACRE) & Its Rivals

Ares Commercial Real Estate Corporation (NYSE: ACRE) is one of 35 publicly-traded companies in the “Mortgage REITs” industry, but how does it compare to its competitors? We will compare Ares Commercial Real Estate Corporation to similar businesses based on the strength of its profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Dividends

Ares Commercial Real Estate Corporation pays an annual dividend of $1.08 per share and has a dividend yield of 8.4%. Ares Commercial Real Estate Corporation pays out 94.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Mortgage REITs” companies pay a dividend yield of 10.2% and pay out 77.1% of their earnings in the form of a dividend. Ares Commercial Real Estate Corporation lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Profitability

This table compares Ares Commercial Real Estate Corporation and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ares Commercial Real Estate Corporation 33.69% 7.76% 2.16%
Ares Commercial Real Estate Corporation Competitors 48.54% 9.79% 2.53%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Ares Commercial Real Estate Corporation and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ares Commercial Real Estate Corporation 1 2 3 0 2.33
Ares Commercial Real Estate Corporation Competitors 116 844 839 33 2.43

Ares Commercial Real Estate Corporation currently has a consensus target price of $14.31, indicating a potential upside of 10.69%. As a group, “Mortgage REITs” companies have a potential upside of 3.96%. Given Ares Commercial Real Estate Corporation’s higher probable upside, equities research analysts plainly believe Ares Commercial Real Estate Corporation is more favorable than its competitors.

Valuation & Earnings

This table compares Ares Commercial Real Estate Corporation and its competitors top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Ares Commercial Real Estate Corporation $81.96 million $40.33 million 11.34
Ares Commercial Real Estate Corporation Competitors $383.25 million $201.70 million 5.96

Ares Commercial Real Estate Corporation’s competitors have higher revenue and earnings than Ares Commercial Real Estate Corporation. Ares Commercial Real Estate Corporation is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Insider & Institutional Ownership

64.2% of Ares Commercial Real Estate Corporation shares are owned by institutional investors. Comparatively, 57.0% of shares of all “Mortgage REITs” companies are owned by institutional investors. 1.8% of Ares Commercial Real Estate Corporation shares are owned by insiders. Comparatively, 3.2% of shares of all “Mortgage REITs” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

Ares Commercial Real Estate Corporation has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Ares Commercial Real Estate Corporation’s competitors have a beta of 0.68, meaning that their average share price is 32% less volatile than the S&P 500.

Summary

Ares Commercial Real Estate Corporation competitors beat Ares Commercial Real Estate Corporation on 10 of the 15 factors compared.

About Ares Commercial Real Estate Corporation

Ares Commercial Real Estate Corporation is a specialty finance company. The Company is primarily engaged in originating and investing in commercial real estate (CRE) loans and related investments. The Company operates through principal lending segment. Its target investments include senior mortgage loans, subordinated debt, preferred equity, mezzanine loans and other CRE investment opportunities, including commercial mortgage-backed securities. These investments are generally held for investment and are secured, directly or indirectly, by office, multifamily, retail, industrial, lodging, senior-living, self-storage and other commercial real estate properties, or by ownership interests therein. Through the Company’s manager, Ares Commercial Real Estate Management LLC, it has investment professionals located across the United States and Europe who directly source loan opportunities for the Company with owners, operators and sponsors of CRE properties.

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