NYSE:ACRE

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

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. More Details


Snowflake Analysis

Moderate growth potential with imperfect balance sheet.


Similar Companies

Share Price & News

How has Ares Commercial Real Estate's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ACRE is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: ACRE's weekly volatility has decreased from 16% to 7% over the past year.


Market Performance


7 Day Return

4.7%

ACRE

-0.9%

US Mortgage REITs

0.7%

US Market


1 Year Return

-24.1%

ACRE

-28.2%

US Mortgage REITs

22.2%

US Market

Return vs Industry: ACRE exceeded the US Mortgage REITs industry which returned -28.8% over the past year.

Return vs Market: ACRE underperformed the US Market which returned 22.7% over the past year.


Shareholder returns

ACREIndustryMarket
7 Day4.7%-0.9%0.7%
30 Day20.8%17.9%11.8%
90 Day20.5%17.7%8.6%
1 Year-13.6%-24.1%-20.2%-28.2%25.0%22.2%
3 Year19.4%-11.8%-5.4%-31.2%49.4%39.5%
5 Year51.8%-5.2%43.1%-17.3%100.2%78.1%

Long-Term Price Volatility Vs. Market

How volatile is Ares Commercial Real Estate's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Ares Commercial Real Estate undervalued compared to its fair value and its price relative to the market?

21.92x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ACRE ($11.78) is trading above our estimate of fair value ($7.76)

Significantly Below Fair Value: ACRE is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ACRE is poor value based on its PE Ratio (21.9x) compared to the US Mortgage REITs industry average (18.7x).

PE vs Market: ACRE is poor value based on its PE Ratio (21.9x) compared to the US market (19.4x).


Price to Earnings Growth Ratio

PEG Ratio: ACRE is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: ACRE's PB Ratio (0.8x) is in line with the US Mortgage REITs industry average.


Next Steps

Future Growth

How is Ares Commercial Real Estate forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

34.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ACRE's forecast earnings growth (34.3% per year) is above the savings rate (2.2%).

Earnings vs Market: ACRE's earnings (34.3% per year) are forecast to grow faster than the US market (21.8% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ACRE's revenue (1.9% per year) is forecast to grow slower than the US market (10.2% per year).

High Growth Revenue: ACRE's revenue (1.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ACRE's Return on Equity is forecast to be low in 3 years time (9.9%).


Next Steps

Past Performance

How has Ares Commercial Real Estate performed over the past 5 years?

-1.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ACRE has high quality earnings.

Growing Profit Margin: ACRE's current net profit margins (28.8%) are lower than last year (53.5%).


Past Earnings Growth Analysis

Earnings Trend: ACRE's earnings have declined by 1.3% per year over the past 5 years.

Accelerating Growth: ACRE's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ACRE had negative earnings growth (-54.2%) over the past year, making it difficult to compare to the Mortgage REITs industry average (-16.6%).


Return on Equity

High ROE: ACRE's Return on Equity (3.6%) is considered low.


Next Steps

Financial Health

How is Ares Commercial Real Estate's financial position?


Financial Position Analysis

Short Term Liabilities: ACRE's short term assets ($1.9B) exceed its short term liabilities ($653.3M).

Long Term Liabilities: ACRE's short term assets ($1.9B) exceed its long term liabilities ($826.4M).


Debt to Equity History and Analysis

Debt Level: ACRE's debt to equity ratio (310.5%) is considered high.

Reducing Debt: ACRE's debt to equity ratio has increased from 195.7% to 310.5% over the past 5 years.

Debt Coverage: ACRE's debt is not well covered by operating cash flow (2.1%).

Interest Coverage: Insufficient data to determine if ACRE's interest payments on its debt are well covered by EBIT.


Balance Sheet


Next Steps

Dividend

What is Ares Commercial Real Estate current dividend yield, its reliability and sustainability?

11.21%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ACRE's dividend (11.21%) is higher than the bottom 25% of dividend payers in the US market (1.48%).

High Dividend: ACRE's dividend (11.21%) is in the top 25% of dividend payers in the US market (4.14%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, ACRE has been paying a dividend for less than 10 years.

Growing Dividend: ACRE's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (245.6%), ACRE's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ACRE's dividends in 3 years are not forecast to be well covered by earnings (106.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.7yrs

Average management tenure


CEO

Bryan Donohoe (41 yo)

1

Tenure

Mr. Bryan Donohoe serves as Partner and Head of Real Estate Debt of Ares Real Estate Group at Ares Management Corporation since 2019. He is Chief Executive Officer at Ares Commercial Real Estate Corporatio...


Leadership Team

NamePositionTenureCompensationOwnership
Bryan Donohoe
Chief Executive Officer1yrno datano data
Tae-Sik Yoon
CFO & Treasurer8.42yrsUS$767.59k0.23%
$ 873.1k
Anton Feingold
General Counsel1.67yrsUS$400.64k0.053%
$ 200.5k
David Roth
President1.42yrsno datano data
Donald Haisch
Chief Accounting Officer6.83yrsno datano data
Carl Drake
Partner/Head of Public Investor Relations & Communicationsno datano datano data
Michele Brancati
Investor Relations Contactno datano datano data
A. Lamont
Partner & Co-Head of European Real Estate Equity0.83yrno datano data
John Ruane
Partner & Co-Head of European Real Estate Equity0.83yrno datano data
James Mosier
Principal6.42yrsno datano data
Sumit Sasidharan
MD, Head of Capital Markets3.25yrsno datano data
Veronica Mendiola Mayer
Principal of Ares Public Investor Relations & Corporate Communications Groupno datano datano data

1.7yrs

Average Tenure

47yo

Average Age

Experienced Management: ACRE's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Michael Arougheti
Director9.25yrsno data1.23%
$ 4.7m
William Benjamin
Chairman of the Board2.83yrsno data0.056%
$ 212.6k
James Skinner
Independent Director4.67yrsUS$135.00k0.12%
$ 449.2k
Rand April
Independent Director4.67yrsUS$124.00k0.12%
$ 471.1k
Edmond Moriarty
Independent Director2.67yrsUS$130.00k0.066%
$ 251.4k
Caroline Blakely
Lead Independent Directorno dataUS$135.00k0.10%
$ 381.9k
William Browning
Independent Director6.83yrsUS$137.00k0.080%
$ 303.8k

4.7yrs

Average Tenure

65yo

Average Age

Experienced Board: ACRE's board of directors are considered experienced (4.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 16%.


Top Shareholders

Company Information

Ares Commercial Real Estate Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Ares Commercial Real Estate Corporation
  • Ticker: ACRE
  • Exchange: NYSE
  • Founded: 2011
  • Industry: Mortgage REITs
  • Sector: Diversified Financials
  • Market Cap: US$379.575m
  • Shares outstanding: 33.21m
  • Website: https://www.arescre.com

Location

  • Ares Commercial Real Estate Corporation
  • 245 Park Avenue
  • 42nd Floor
  • New York
  • New York
  • 10167
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ACRENYSE (New York Stock Exchange)YesCommon StockUSUSDApr 2012
41IDB (Deutsche Boerse AG)YesCommon StockDEEURApr 2012

Biography

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 finan...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/12/02 23:08
End of Day Share Price2020/12/02 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.