Ares Commercial Real Estate (NYSE:ACRE) and Hammerson (OTCMKTS:HMSNF) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.
Earnings and Valuation
This table compares Ares Commercial Real Estate and Hammerson’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Ares Commercial Real Estate||$118.28 million||3.75||$38.60 million||$1.39||11.09|
Ares Commercial Real Estate has higher earnings, but lower revenue than Hammerson.
This is a breakdown of recent recommendations and price targets for Ares Commercial Real Estate and Hammerson, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ares Commercial Real Estate||0||3||2||1||2.67|
Ares Commercial Real Estate presently has a consensus target price of $14.60, suggesting a potential downside of 5.32%. Given Ares Commercial Real Estate’s stronger consensus rating and higher probable upside, research analysts plainly believe Ares Commercial Real Estate is more favorable than Hammerson.
Insider & Institutional Ownership
64.7% of Ares Commercial Real Estate shares are owned by institutional investors. 2.2% of Ares Commercial Real Estate shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This table compares Ares Commercial Real Estate and Hammerson’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ares Commercial Real Estate||32.63%||9.39%||2.31%|
Ares Commercial Real Estate pays an annual dividend of $1.32 per share and has a dividend yield of 8.6%. Hammerson does not pay a dividend. Ares Commercial Real Estate pays out 95.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ares Commercial Real Estate has increased its dividend for 3 consecutive years.
Volatility and Risk
Ares Commercial Real Estate has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500. Comparatively, Hammerson has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.
Ares Commercial Real Estate beats Hammerson on 11 of the 15 factors compared between the two stocks.
About Ares Commercial Real Estate
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 solutions for the owners, operators, and sponsors of commercial real estate (CRE) properties. The company originates senior mortgage loans, subordinate debt products, real estate preferred equity investments, mezzanine loans, and other CRE investments. Ares Commercial Real Estate Corporation has elected and qualified to be taxed as a real estate investment trust for the United States federal income tax purposes under the Internal Revenue Code of 1986. Ares Commercial Real Estate Management LLC operates as the manager of the company. The company was founded in 2011 and is headquartered in New York, New York.
We are an owner, manager and developer of retail destinations in Europe. Our portfolio includes investments in 22 prime shopping centres in the UK, Ireland and France, 15 convenient retail parks in the UK and 20 premium outlets across Europe.
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