Cedar Realty Trust (NYSE:CDR) and Ares Commercial Real Estate (NYSE:ACRE) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.
This is a summary of current ratings and price targets for Cedar Realty Trust and Ares Commercial Real Estate, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cedar Realty Trust||1||0||0||0||1.00|
|Ares Commercial Real Estate||0||0||1||0||3.00|
Cedar Realty Trust presently has a consensus target price of $2.00, indicating a potential downside of 28.57%. Ares Commercial Real Estate has a consensus target price of $16.00, indicating a potential downside of 2.38%. Given Ares Commercial Real Estate’s stronger consensus rating and higher probable upside, analysts plainly believe Ares Commercial Real Estate is more favorable than Cedar Realty Trust.
Valuation and Earnings
This table compares Cedar Realty Trust and Ares Commercial Real Estate’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cedar Realty Trust||$152.02 million||1.64||$3.88 million||$0.58||4.83|
|Ares Commercial Real Estate||$118.28 million||4.00||$38.60 million||$1.39||11.79|
Ares Commercial Real Estate has lower revenue, but higher earnings than Cedar Realty Trust. Cedar Realty Trust is trading at a lower price-to-earnings ratio than Ares Commercial Real Estate, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
87.7% of Cedar Realty Trust shares are held by institutional investors. Comparatively, 62.8% of Ares Commercial Real Estate shares are held by institutional investors. 4.5% of Cedar Realty Trust shares are held by insiders. Comparatively, 2.2% of Ares Commercial Real Estate shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Cedar Realty Trust pays an annual dividend of $0.20 per share and has a dividend yield of 7.1%. Ares Commercial Real Estate pays an annual dividend of $1.32 per share and has a dividend yield of 8.1%. Cedar Realty Trust pays out 34.5% of its earnings in the form of 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 raised its dividend for 4 consecutive years. Ares Commercial Real Estate is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Cedar Realty Trust and Ares Commercial Real Estate’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cedar Realty Trust||10.77%||4.11%||1.28%|
|Ares Commercial Real Estate||31.89%||9.11%||2.36%|
Risk and Volatility
Cedar Realty Trust has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Ares Commercial Real Estate has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.
Ares Commercial Real Estate beats Cedar Realty Trust on 11 of the 17 factors compared between the two stocks.
Cedar Realty Trust Company Profile
Cedar Realty Trust, Inc. is a fully-integrated real estate investment trust which focuses on the ownership, operation and redevelopment of grocery-anchored shopping centers in high-density urban markets from Washington, D.C. to Boston. The Company's portfolio (excluding properties treated as "held for sale") comprises 58 properties, with approximately 8.7 million square feet of gross leasable area.
Ares Commercial Real Estate Company Profile
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.
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