Ares Commercial Real Estate Corporation (ACRE) vs Apollo Commercial Real Estate Finance (ARI)

Ares Commercial Real Estate Corporation and Apollo Commercial Real Estate Finance are both Reit Mortgage companies. Apollo Commercial Real Estate Finance is the larger, with a market value of $309.8M against $188.6M — 1.6× the size. Ares Commercial Real Estate Corporation has negative trailing earnings, so its P/E is not meaningful; Apollo Commercial Real Estate Finance trades at 3.0×. Ares Commercial Real Estate Corporation grew revenue faster over the last twelve months: −10.6% against −14.7%. Apollo Commercial Real Estate Finance has the higher net margin (50.3% vs −8.04%) and the higher return on invested capital (339.7% vs 0.65%). Both pay a dividend; Apollo Commercial Real Estate Finance yields more (176.4% vs 17.6%). Across the 22 metrics below, Apollo Commercial Real Estate Finance leads on 17 and Ares Commercial Real Estate Corporation on 5.

Valuation

Metric ACRE ARI Reit Mortgage median
P/E n/m 3.01 14.55
P/S 3.42 1.33 1.72
P/B 0.39 0.25 0.52
Price to free cash flow 10.49 14.75 4.35
EV/EBITDA 63.42 3.77 28.27
EV/Sales 26.16 1.26 15.73
Earnings yield (2.35%) 33.20% 0.23%
Free cash flow yield 9.53% 6.78% 13.86%

Profitability

Metric ACRE ARI Reit Mortgage median
Gross margin 100.00% 87.84% 100.00%
Operating margin 31.94% 35.13% 31.94%
Net margin (8.04%) 50.33% (1.81%)
Free cash flow margin 32.64% 9.00% 27.05%
Return on equity (0.88%) 7.72% (0.49%)
Return on assets (0.27%) 2.00% (0.06%)
Return on invested capital 0.65% 339.65% 0.79%

Growth

Metric ACRE ARI Reit Mortgage median
Revenue growth (TTM) (10.60%) (14.66%) 1.39%
EPS growth (last fiscal year) 96.88% 183.51% 45.25%
Revenue growth, 5-year CAGR (7.89%) (0.51%) 14.60%
Net income growth, 5-year CAGR 0.00% 88.28% 0.00%

Health

Metric ACRE ARI Reit Mortgage median
Debt to equity 2.58 0.00 2.91
Current ratio 0.00 2.45 0.82
Net debt to EBITDA 44.04 9.96 18.31

Dividend

Metric ACRE ARI Reit Mortgage median
Dividend yield 17.60% 176.35% 17.37%
Payout ratio — 5.31 1.87

Size

Metric ACRE ARI Reit Mortgage median
Market cap 188.64m 309.80m 409.49m

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