Ares Commercial Real Estate (ACRE) & Granite Point Mortgage Trust (GPMT) Financial Comparison
Ares Commercial Real Estate (NYSE: ACRE) and Granite Point Mortgage Trust (NYSE:GPMT) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, risk, earnings, valuation and analyst recommendations.
Valuation and Earnings
This table compares Ares Commercial Real Estate and Granite Point Mortgage Trust’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Ares Commercial Real Estate||$81.96 million||4.52||$40.33 million||$1.14||11.36|
|Granite Point Mortgage Trust||N/A||N/A||N/A||$1.18||14.77|
This is a summary of recent recommendations for Ares Commercial Real Estate and Granite Point Mortgage Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ares Commercial Real Estate||0||2||2||0||2.50|
|Granite Point Mortgage Trust||0||1||4||0||2.80|
Ares Commercial Real Estate presently has a consensus price target of $14.17, indicating a potential upside of 9.40%. Granite Point Mortgage Trust has a consensus price target of $19.50, indicating a potential upside of 11.88%. Given Granite Point Mortgage Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Granite Point Mortgage Trust is more favorable than Ares Commercial Real Estate.
Ares Commercial Real Estate pays an annual dividend of $1.08 per share and has a dividend yield of 8.3%. Granite Point Mortgage Trust pays an annual dividend of $0.70 per share and has a dividend yield of 4.0%. Ares Commercial Real Estate 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. Granite Point Mortgage Trust pays out 59.3% of its earnings in the form of a dividend. Ares Commercial Real Estate has increased its dividend for 2 consecutive years. Ares Commercial Real Estate is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Ares Commercial Real Estate and Granite Point Mortgage Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ares Commercial Real Estate||33.69%||7.76%||2.16%|
|Granite Point Mortgage Trust||N/A||N/A||N/A|
Insider & Institutional Ownership
63.2% of Ares Commercial Real Estate shares are held by institutional investors. Comparatively, 13.5% of Granite Point Mortgage Trust shares are held by institutional investors. 1.8% of Ares Commercial Real Estate shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Ares Commercial Real Estate beats Granite Point Mortgage Trust on 8 of the 14 factors compared between the two stocks.
About Ares Commercial Real Estate
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.
About Granite Point Mortgage Trust
Granite Point Mortgage Trust Inc. is focused primarily on directly originating, investing in and managing senior floating-rate commercial mortgage loans and other debt, such as commercial real estate investments. The Company formed to continue and expand the commercial real estate lending business. The Company is a long-term, fundamental value-oriented investor. The Company constructs its own investment portfolio on a loan-by-loan basis, emphasizing rigorous credit underwriting, selectivity and diversification available in the market. The Company provides intermediate-term bridge or transitional financing for a variety of purposes, including acquisitions, recapitalizations, refinancing and a range of business plans including lease-up, renovation, repositioning and repurposing of the property. It generally targets the top 25-50, metropolitan statistical areas (MSA) in the United States.
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