Ares Commercial Real Estate Corporation (NYSE: ACRE) is one of 37 public companies in the “Mortgage REITs” industry, but how does it contrast to its competitors? We will compare Ares Commercial Real Estate Corporation to similar businesses based on the strength of its institutional ownership, dividends, profitability, analyst recommendations, valuation, risk and earnings.

Volatility and Risk

Ares Commercial Real Estate Corporation has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500. Comparatively, Ares Commercial Real Estate Corporation’s competitors have a beta of 0.71, meaning that their average stock price is 29% less volatile than the S&P 500.

Valuation & Earnings

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

Gross Revenue EBITDA Price/Earnings Ratio
Ares Commercial Real Estate Corporation $45.12 million N/A 9.21
Ares Commercial Real Estate Corporation Competitors $320.94 million $123.24 million 1.33

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.

Analyst Recommendations

This is a summary of current recommendations 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 117 848 853 32 2.43

Ares Commercial Real Estate Corporation presently has a consensus target price of $14.31, indicating a potential upside of 11.04%. As a group, “Mortgage REITs” companies have a potential upside of 5.60%. Given Ares Commercial Real Estate Corporation’s higher probable upside, analysts clearly believe Ares Commercial Real Estate Corporation is more favorable than its competitors.

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 77.1% 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 10.3% and pay out 81.8% of their earnings in the form of a dividend.

Insider and Institutional Ownership

64.2% of Ares Commercial Real Estate Corporation shares are owned by institutional investors. Comparatively, 57.6% 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, 3.3% of shares of all “Mortgage REITs” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

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 45.06% 7.07% 2.03%
Ares Commercial Real Estate Corporation Competitors 49.52% 10.44% 2.69%

Summary

Ares Commercial Real Estate Corporation competitors beat Ares Commercial Real Estate Corporation on 9 of the 14 factors compared.

Ares Commercial Real Estate Corporation Company Profile

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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