DigitalBridge Group (NYSE:DBRG – Get Free Report) and Ares Commercial Real Estate (NYSE:ACRE – Get Free Report) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.
Insider and Institutional Ownership
92.7% of DigitalBridge Group shares are owned by institutional investors. Comparatively, 41.3% of Ares Commercial Real Estate shares are owned by institutional investors. 3.6% of DigitalBridge Group shares are owned by company insiders. Comparatively, 1.8% of Ares Commercial Real Estate shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares DigitalBridge Group and Ares Commercial Real Estate”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| DigitalBridge Group | $228.14 million | 12.29 | $70.52 million | $0.06 | 255.75 |
| Ares Commercial Real Estate | $69.65 million | 4.04 | -$34.99 million | ($0.15) | -34.10 |
DigitalBridge Group has higher revenue and earnings than Ares Commercial Real Estate. Ares Commercial Real Estate is trading at a lower price-to-earnings ratio than DigitalBridge Group, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current recommendations for DigitalBridge Group and Ares Commercial Real Estate, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| DigitalBridge Group | 1 | 6 | 4 | 0 | 2.27 |
| Ares Commercial Real Estate | 1 | 3 | 1 | 1 | 2.33 |
DigitalBridge Group presently has a consensus target price of $16.22, indicating a potential upside of 5.72%. Ares Commercial Real Estate has a consensus target price of $5.33, indicating a potential upside of 4.27%. Given DigitalBridge Group’s higher probable upside, analysts plainly believe DigitalBridge Group is more favorable than Ares Commercial Real Estate.
Profitability
This table compares DigitalBridge Group and Ares Commercial Real Estate’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| DigitalBridge Group | N/A | 4.78% | 2.29% |
| Ares Commercial Real Estate | -13.02% | -5.15% | -1.80% |
Volatility and Risk
DigitalBridge Group has a beta of 1.69, suggesting that its share price is 69% more volatile than the S&P 500. Comparatively, Ares Commercial Real Estate has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500.
Dividends
DigitalBridge Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Ares Commercial Real Estate pays an annual dividend of $0.60 per share and has a dividend yield of 11.7%. DigitalBridge Group pays out 66.7% of its earnings in the form of a dividend. Ares Commercial Real Estate pays out -400.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ares Commercial Real Estate is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
DigitalBridge Group beats Ares Commercial Real Estate on 13 of the 17 factors compared between the two stocks.
About DigitalBridge Group
DigitalBridge is an infrastructure investment firm specializing in digital infrastructure assets. They provide services to institutional investors. They primarily invest in data centers, cell towers, fiber networks, small cells, and edge infrastructure. DigitalBridge Group, Inc. was founded in 1991 and is headquartered in Boca Raton, Florida with additional offices in Los Angles, California, and New York New York.
About Ares Commercial Real Estate
Ares Commercial Real Estate Corporation, a specialty finance company, originates and invests in commercial real estate (CRE) loans and related investments in the United States. It provides a range of financing solutions for the owners, operators, and sponsors of CRE properties. The company originates senior mortgage loans, subordinate debt and preferred equity products, mezzanine loans, and other CRE investments, including commercial mortgage-backed securities. It has elected and qualified to be taxed as a real estate investment trust for the United States federal income tax purposes under the Internal Revenue Code of 1986. Ares Commercial Real Estate Corporation was incorporated in 2011 and is based in New York, New York.
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