NYSE:ACRE

Stock Analysis Report

Executive Summary

Ares Commercial Real Estate Corporation, a specialty finance company, originates and invests in commercial real estate loans and related investments in the United States.

Snowflake

Fundamentals

Fair value with acceptable track record.


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


Market Performance


7 Day Return

0.9%

ACRE

1.9%

US Mortgage REITs

0.07%

US Market


1 Year Return

11.4%

ACRE

-1.3%

US Mortgage REITs

8.9%

US Market

Return vs Industry: ACRE exceeded the US Mortgage REITs industry which returned -1.3% over the past year.

Return vs Market: ACRE exceeded the US Market which returned 8.9% over the past year.


Shareholder returns

ACREIndustryMarket
7 Day0.9%1.9%0.07%
30 Day-2.2%0.6%-0.3%
90 Day3.1%-0.1%-1.6%
1 Year21.8%11.4%9.9%-1.3%11.3%8.9%
3 Year49.9%16.4%38.4%-0.08%46.3%36.8%
5 Year96.1%27.9%57.3%-9.5%62.1%44.3%

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?

11.5x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ACRE ($15.41) is trading above our estimate of fair value ($13.8)

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


Price To Earnings Ratio

PE vs Industry: ACRE is good value based on its PE Ratio (11.5x) compared to the Mortgage REITs industry average (12.6x).

PE vs Market: ACRE is good value based on its PE Ratio (11.5x) compared to the US market (17.8x).


Price to Earnings Growth Ratio

PEG Ratio: ACRE is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: ACRE is overvalued based on its PB Ratio (1x) compared to the US Mortgage REITs industry average (1x).


Next Steps

Future Growth

How is Ares Commercial Real Estate forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

15.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ACRE's forecast earnings growth (15.2% per year) is above the savings rate (2.7%).

Earnings vs Market: ACRE's earnings (15.2% per year) are forecast to grow faster than the US market (14.5% per year).

High Growth Earnings: ACRE's earnings are forecast to grow, but not significantly.

Revenue vs Market: ACRE's revenue (3.1% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: ACRE's revenue (3.1% 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 (9.4%).


Next Steps

Past Performance

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

11.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: ACRE's earnings have grown by 11.4% per year over the past 5 years.

Accelerating Growth: ACRE's earnings growth over the past year (6.7%) is below its 5-year average (11.4% per year).

Earnings vs Industry: ACRE earnings growth over the past year (6.7%) exceeded the Mortgage REITs industry 5.2%.


Return on Equity

High ROE: ACRE's Return on Equity (9%) is considered low.


Return on Assets

ROA vs Industry: ACRE has a higher Return on Assets than the Mortgage REITs industry average last year.


Return on Capital Employed

ROCE Improving: Insufficient data to calculate ACRE's Return on Capital Employed to determine if it has improved over the past 3 years.


Next Steps

Financial Health

How is Ares Commercial Real Estate's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: ACRE has a low level of unsold assets or inventory.

Debt Coverage by Assets: ACRE's debt is covered by short term assets (assets are 1.321600x debt).


Financial Institutions Analysis

Asset Level: ACRE's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if ACRE has a sufficient allowance for bad loans.

Low Risk Liabilities: ACRE reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if ACRE has an acceptable proportion of non-loan assets held.

Low Risk Deposits: ACRE has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if ACRE has an appropriate level of bad loans.


Next Steps

Dividend

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

8.57%

Current Dividend Yield


Dividend Yield vs Market

company8.6%marketbottom25%1.4%markettop25%3.7%industryaverage10.2%forecastin3Years8.6%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: ACRE's dividend (8.57%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: ACRE's dividend (8.57%) is in the top 25% of dividend payers in the US market (3.68%)

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 7 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (94%), 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 (99.4% payout ratio).


Next Steps

Management

What is the CEO of Ares Commercial Real Estate's salary, the management and board of directors tenure and is there insider trading?

3.6yrs

Average management tenure


CEO

Jamie Henderson (49yo)

2yrs

Tenure

US$559,600

Compensation

Mr. James Alan Henderson, also known as Jamie, has been Chief Investment Officer of Ares Commercial Real Estate Corporation since April 27, 2017 and served as its President until July 22, 2019. Mr. Henders ...


Management Age and Tenure

3.6yrs

Average Tenure

50.5yo

Average Age

Experienced Management: ACRE's management team is considered experienced (3.6 years average tenure).


Board Age and Tenure

3.5yrs

Average Tenure

61yo

Average Age

Experienced Board: ACRE's board of directors are considered experienced (3.5 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUS$149,99615 Mar 19
Rand April
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares9,730
Max PriceUS$15.42
BuyUS$50,03908 Mar 19
William Benjamin
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares3,300
Max PriceUS$15.16
SellUS$193,78414 Dec 18
James Henderson
EntityIndividual
Role
Chief Executive Officer
CEO, Chief Investment Officer & Director
Shares13,618
Max PriceUS$14.23

Ownership Breakdown


Management Team

  • Tae-Sik Yoon (52yo)

    CFO & Treasurer

    • Tenure: 7.3yrs
    • Compensation: US$755.60k
  • David Roth (52yo)

    President

    • Tenure: 0.3yrs
  • Carl Drake

    Partner/Head of Public Investor Relations & Communications

    • Tenure: 0yrs
  • Anton Feingold (38yo)

    General Counsel

    • Tenure: 0.8yrs
  • Don Haisch

    Chief Accounting Officer

    • Tenure: 5.7yrs
  • Keith Kooper

    VP & Assistant Secretary

    • Tenure: 0yrs
  • James Mosier

    Principal

    • Tenure: 5.3yrs
  • Jamie Henderson (49yo)

    CEO, Chief Investment Officer & Director

    • Tenure: 2yrs
    • Compensation: US$559.60k
  • Michele Brancati

    Investor Relations Contact

    • Tenure: 0yrs
  • Veronica Mendiola Mayer

    Vice President of Public Investor Relations & Communications

    • Tenure: 0yrs

Board Members

  • Mike Arougheti (47yo)

    Director

    • Tenure: 8.1yrs
  • Bill Benjamin (54yo)

    Chairman of the Board

    • Tenure: 1.7yrs
  • James Skinner (66yo)

    Independent Director

    • Tenure: 3.5yrs
    • Compensation: US$135.00k
  • Rand April (68yo)

    Independent Director

    • Tenure: 3.5yrs
    • Compensation: US$124.00k
  • Ed Moriarty (58yo)

    Independent Director

    • Tenure: 1.5yrs
    • Compensation: US$162.00k
  • Caroline Blakely (64yo)

    Lead Independent Director

    • Tenure: 0yrs
    • Compensation: US$135.00k
  • Bill Browning (65yo)

    Independent Director

    • Tenure: 5.7yrs
    • Compensation: US$137.00k
  • Jamie Henderson (49yo)

    CEO, Chief Investment Officer & Director

    • Tenure: 2yrs
    • Compensation: US$559.60k

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$440.831m
  • Shares outstanding: 28.61m
  • 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

Biography

Ares Commercial Real Estate Corporation, a specialty finance company, originates and invests in commercial real estate loans and related investments in the United States. It provides a range of financing s ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/23 00:24
End of Day Share Price2019/10/22 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.