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

Analyst Ratings

This is a summary of recent recommendations and price targets for Ares Commercial Real Estate Corporation and its rivals, as reported 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 117 852 853 33 2.43

Ares Commercial Real Estate Corporation currently has a consensus target price of $14.42, indicating a potential upside of 10.90%. As a group, “Mortgage REITs” companies have a potential upside of 8.14%. Given Ares Commercial Real Estate Corporation’s higher probable upside, research analysts clearly believe Ares Commercial Real Estate Corporation is more favorable than its rivals.

Institutional and Insider Ownership

64.2% of Ares Commercial Real Estate Corporation shares are owned by institutional investors. Comparatively, 56.8% 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 endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Ares Commercial Real Estate Corporation has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, Ares Commercial Real Estate Corporation’s rivals have a beta of 0.64, indicating that their average share price is 36% less volatile than the S&P 500.

Dividends

Ares Commercial Real Estate Corporation pays an annual dividend of $1.08 per share and has a dividend yield of 8.3%. Ares Commercial Real Estate Corporation pays out 95.6% 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 10.5% and pay out 92.4% of their earnings in the form of a dividend. Ares Commercial Real Estate Corporation lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Profitability

This table compares Ares Commercial Real Estate Corporation and its rivals’ 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 51.30% 10.08% 2.56%

Earnings and Valuation

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

Gross Revenue NetIncome Price/Earnings Ratio
Ares Commercial Real Estate Corporation $81.96 million $40.33 million 11.50
Ares Commercial Real Estate Corporation Competitors $383.25 million $201.70 million 1.19

Ares Commercial Real Estate Corporation’s rivals 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 rivals, indicating that it is currently more expensive than other companies in its industry.

Summary

Ares Commercial Real Estate Corporation rivals 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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