Ares Commercial Real Estate (NYSE:ACRE – Get Free Report) and Modiv Industrial (NYSE:MDV – Get Free Report) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.
Volatility & Risk
Ares Commercial Real Estate has a beta of 1.5, suggesting that its stock price is 50% more volatile than the S&P 500. Comparatively, Modiv Industrial has a beta of -0.21, suggesting that its stock price is 121% less volatile than the S&P 500.
Earnings & Valuation
This table compares Ares Commercial Real Estate and Modiv Industrial”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 | $88.96 million | 3.59 | -$38.87 million | ($1.18) | -4.96 |
| Modiv Industrial | $47.12 million | 3.12 | -$6.61 million | ($0.11) | -138.78 |
Profitability
This table compares Ares Commercial Real Estate and Modiv Industrial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ares Commercial Real Estate | -95.81% | -5.10% | -1.44% |
| Modiv Industrial | 6.72% | 1.42% | 0.61% |
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Ares Commercial Real Estate and Modiv Industrial, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ares Commercial Real Estate | 2 | 5 | 0 | 0 | 1.71 |
| Modiv Industrial | 0 | 0 | 1 | 0 | 3.00 |
Ares Commercial Real Estate currently has a consensus price target of $6.80, indicating a potential upside of 16.14%. Modiv Industrial has a consensus price target of $18.00, indicating a potential upside of 17.91%. Given Modiv Industrial’s stronger consensus rating and higher probable upside, analysts plainly believe Modiv Industrial is more favorable than Ares Commercial Real Estate.
Insider & Institutional Ownership
41.3% of Ares Commercial Real Estate shares are held by institutional investors. Comparatively, 8.2% of Modiv Industrial shares are held by institutional investors. 2.8% of Ares Commercial Real Estate shares are held by insiders. Comparatively, 7.4% of Modiv Industrial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Dividends
Ares Commercial Real Estate pays an annual dividend of $1.00 per share and has a dividend yield of 17.1%. Modiv Industrial pays an annual dividend of $1.17 per share and has a dividend yield of 7.7%. Ares Commercial Real Estate pays out -84.7% of its earnings in the form of a dividend. Modiv Industrial pays out -1,063.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Summary
Modiv Industrial beats Ares Commercial Real Estate on 10 of the 16 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 (CRE) loans and related investments in the United States. It provides a range of financing solutions for the owners, operators, and sponsors of CRE properties. The company originates senior mortgage loans, subordinate debt and preferred equity products, mezzanine loans, and other CRE investments, including commercial mortgage-backed securities. It 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 Corporation was incorporated in 2011 and is based in New York, New York.
About Modiv Industrial
Modiv Industrial, Inc. is an internally managed REIT that is focused on single-tenant net-lease industrial manufacturing real estate. The Company actively acquires critical industrial manufacturing properties with long-term leases to tenants that fuel the national economy and strengthen the nation's supply chains.
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