NYSE:ACRE

Stock Analysis Report

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Market Cap

US$687.2m

Last Updated

2021/08/03 00:44 UTC

Data Sources

Company Financials +

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

Solid track record and fair value.


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 +/- 5% a week.

Volatility Over Time: ACRE's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

-4.0%

ACRE

-0.5%

US Mortgage REITs

-0.4%

US Market


1 Year Return

63.0%

ACRE

34.6%

US Mortgage REITs

34.4%

US Market

Return vs Industry: ACRE exceeded the US Mortgage REITs industry which returned 35.7% over the past year.

Return vs Market: ACRE exceeded the US Market which returned 35.9% over the past year.


Shareholder returns

ACREIndustryMarket
7 Day-4.0%-0.5%-0.4%
30 Day-1.4%-3.6%-0.4%
90 Day-0.5%-2.3%4.0%
1 Year81.9%63.0%47.2%34.6%36.5%34.4%
3 Year41.9%3.5%5.7%-22.1%62.0%51.9%
5 Year81.6%12.5%37.4%-19.0%121.8%97.2%

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?

26.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ACRE ($14.62) is trading below our estimate of fair value ($19.8)

Significantly Below Fair Value: ACRE is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ACRE is poor value based on its PE Ratio (8.3x) compared to the US Mortgage REITs industry average (7.6x).

PE vs Market: ACRE is good value based on its PE Ratio (8.3x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: ACRE's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: ACRE's PB Ratio (1x) is in line with the US Mortgage REITs industry average.


Future Growth

How is Ares Commercial Real Estate forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

-1.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ACRE's earnings are forecast to decline over the next 3 years (-1.9% per year).

Earnings vs Market: ACRE's earnings are forecast to decline over the next 3 years (-1.9% per year).

High Growth Earnings: ACRE's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ACRE's revenue (1.8% per year) is forecast to grow slower than the US market (9.2% per year).

High Growth Revenue: ACRE's revenue (1.8% 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 (10.1%).


Past Performance

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

6.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ACRE has high quality earnings.

Growing Profit Margin: ACRE's current net profit margins (64.8%) are higher than last year (20.1%).


Past Earnings Growth Analysis

Earnings Trend: ACRE's earnings have grown by 6.4% per year over the past 5 years.

Accelerating Growth: ACRE's earnings growth over the past year (459.7%) exceeds its 5-year average (6.4% per year).

Earnings vs Industry: ACRE earnings growth over the past year (459.7%) exceeded the Mortgage REITs industry 49.5%.


Return on Equity

High ROE: ACRE's Return on Equity (9.2%) is considered low.


Financial Health

How is Ares Commercial Real Estate's financial position?


Financial Position Analysis

Short Term Liabilities: ACRE's short term assets ($2.2B) exceed its short term liabilities ($384.7M).

Long Term Liabilities: ACRE's short term assets ($2.2B) exceed its long term liabilities ($1.2B).


Debt to Equity History and Analysis

Debt Level: ACRE's debt to equity ratio (227.9%) is considered high.

Reducing Debt: ACRE's debt to equity ratio has increased from 171.7% to 227.9% over the past 5 years.

Debt Coverage: ACRE's debt is not well covered by operating cash flow (2.4%).

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


Balance Sheet


Dividend

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

9.03%

Current Dividend Yield


Upcoming Dividend Payment

TodayAug 03 2021Ex Dividend DateSep 29 2021Dividend Pay DateOct 15 202116 days from Ex DividendBuy in the next 56 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: ACRE's dividend (9.03%) is higher than the bottom 25% of dividend payers in the US market (1.32%).

High Dividend: ACRE's dividend (9.03%) is in the top 25% of dividend payers in the US market (3.55%)


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 reasonable payout ratio (74.8%), ACRE's dividend payments are 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 (100.7% payout ratio).


Next Steps

Management

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

2.3yrs

Average management tenure


CEO

Bryan Donohoe (42 yo)

1.67yrs

Tenure

US$629,625

Compensation

Mr. Bryan Patrick 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 Co...


Leadership Team

Experienced Management: ACRE's management team is considered experienced (2.3 years average tenure).


Board Members

Experienced Board: ACRE's board of directors are considered experienced (5.3 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.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 41.5%.


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$687.167m
  • Shares outstanding: 47.00m
  • Website: https://www.arescre.com

Location

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

Listings


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 Analysis2021/08/03 00:44
End of Day Share Price2021/08/02 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


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.