Critical Contrast: Ares Commercial Real Estate (NYSE:ACRE) and New York Mortgage Trust (NASDAQ:NYMTL)

Ares Commercial Real Estate (NYSE:ACRE) and New York Mortgage Trust (NASDAQ:NYMTL) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, valuation, earnings and profitability.

Institutional & Insider Ownership

41.3% of Ares Commercial Real Estate shares are owned by institutional investors. 2.3% of Ares Commercial Real Estate shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for Ares Commercial Real Estate and New York Mortgage Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ares Commercial Real Estate	2	4	1	0	1.86
New York Mortgage Trust	0	0	0	0	0.00

Ares Commercial Real Estate presently has a consensus target price of $5.25, suggesting a potential upside of 23.09%. Given Ares Commercial Real Estate’s stronger consensus rating and higher probable upside, research analysts clearly believe Ares Commercial Real Estate is more favorable than New York Mortgage Trust.

Earnings and Valuation

This table compares Ares Commercial Real Estate and New York Mortgage Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ares Commercial Real Estate	$18.12 million	13.06	-$900,000.00	($0.36)	-11.85
New York Mortgage Trust	$273.96 million	N/A	N/A	N/A	N/A

New York Mortgage Trust has higher revenue and earnings than Ares Commercial Real Estate.

Profitability

This table compares Ares Commercial Real Estate and New York Mortgage Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ares Commercial Real Estate	-37.21%	-2.80%	-0.91%
New York Mortgage Trust	N/A	N/A	N/A

Dividends

Ares Commercial Real Estate pays an annual dividend of $0.60 per share and has a dividend yield of 14.1%. New York Mortgage Trust pays an annual dividend of $1.72 per share and has a dividend yield of 7.0%. Ares Commercial Real Estate pays out -166.7% of its earnings in the form of a dividend.

Summary

Ares Commercial Real Estate beats New York Mortgage Trust on 7 of the 11 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 New York Mortgage Trust

New York Mortgage Trust, Inc. acquires, invests in, finances, and manages mortgage-related single-family and multi-family residential assets in the United States. Its targeted investments include residential loans, including business purpose loans; structured multi-family property investments, such as preferred equity in, and mezzanine loans to owners of multi-family properties; non-agency residential mortgage-backed securities (RMBS); agency RMBS; commercial mortgage-backed securities (CMBS); single-family rental properties; and other mortgage, residential housing, and credit-related assets. The company also qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. New York Mortgage Trust, Inc. was incorporated in 2003 and is headquartered in New York, New York.