Ares Commercial: A Contrarian Investment Pick For 2025
Ares Commercial's business showed stabilization in Q1 with no realized loan losses and progress in debt reduction, signaling a potential turnaround. Despite not fully covering its dividend with distributable earnings, the REIT's improving trajectory suggests positive dividend coverage could return soon. Shares trade at a significant discount to book value, presenting a compelling rebound opportunity for 2025 as the business stabilizes.
Ares Commercial Real Estate Corporation (ACRE) Q1 2025 Earnings Call Transcript
Ares Commercial Real Estate Corporation (NYSE:ACRE ) Q1 2025 - Earnings Conference Call May 7, 2025 12:00 PM ET Company Participants John Stilmar - MD, IR Bryan Donohoe - CEO Jeff Gonzales - CFO Conference Call Participants Rick Shane - JPMorgan Steve Delaney - Citizens JMP Jade Rahmani - KBW Operator Good afternoon. Welcome to Ares Commercial Real Estate Corporation's First Quarter Earnings Conference Call.
Ares Commercial Real Estate (ACRE) Beats Q1 Earnings Estimates
Ares Commercial Real Estate (ACRE) came out with quarterly earnings of $0.13 per share, beating the Zacks Consensus Estimate of a loss of $0.07 per share. This compares to loss of $0.62 per share a year ago.
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Ares Commercial: 50%+ Book Value Discount Is Excessive (Rating Upgrade)
Ares Commercial Real Estate announced a 40% dividend cut for Q1 '25, reducing the quarterly dividend to $0.15 per-share. Persistent loan quality issues, particularly in the office portfolio, forced ACRE to divest loans at a loss and reduce financial leverage. Shares trade at a 50%+ discount to book value, reflecting deep investor distrust despite the REIT's efforts to de-risk and reset for growth.
Ares Commercial Real Estate: 40% Dividend Cut, What Now?
Ares Commercial Real Estate Corporation cut its dividend by 40% due to persistent loan quality issues and underperforming distributable earnings, following a 24% cut in early 2024. The mortgage REIT's book value has declined significantly, now trading at a 50% discount due to ongoing loan losses and a contracting net interest margin. Despite the dividend cuts, the trust's pay-out metrics remain unstable, leading to a 'Hold' rating as concerns about the company's financial stability persist.
Why Dividends Matter, Even The Little Ones
Dividends provide a reliable income stream, especially during tough economic times, alleviating financial pressure without the need to sell shares. Persistent inflation makes dividend income increasingly valuable, as it offers stability when market returns are volatile or negative. Investing in well-established, high-yield dividend companies with strong cash flows can ensure a steady income and reduce financial stress.
Inflation Isn't Dead Yet
US equity markets flirted with fresh record-highs this week while benchmark interest rates hovered around two-month lows as investors weighed positive earnings news against uncomfortable hot inflation data. Complicating the policy outlook for the Federal Reserve, CPI data showed the fastest monthly rise in consumer prices since August, prompting a pledge from Powell for "more work to do." Snapping a two-week losing streak, the S&P 500 rebounded by 1.5%, closing fractionally below its prior record-high set in late January. The tech-heavy Nasdaq 100 rallied nearly 3%.
Ares Commercial Real Estate Corporation (ACRE) Q4 2024 Earnings Call Transcript
Ares Commercial Real Estate Corporation (NYSE:ACRE ) Q4 2024 Earnings Conference Call February 12, 2024 11:00 AM ET Company Participants John Stilmar - MD, IR Bryan Donohoe - CEO Jeff Gonzales - CFO Conference Call Participants Rick Shane - JPMorgan Doug Harter - UBS Jade Rahmani - KBW Chris Muller - Citizens JMP John Nickodemus - BTIG Operator Good afternoon, ladies and gentlemen, and welcome to Ares Commercial Real Estate Corporation's Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode.
Ares Commercial: Mortgage REIT Cuts On Schedule
Ares Commercial cut once again. Q4-2024 saw negative distributable EPS and increased loans rated 4 and 5. ACRE has had the worst underwriting results in mortgage REITs, and it is not even close.
Compared to Estimates, Ares Commercial Real Estate (ACRE) Q4 Earnings: A Look at Key Metrics
The headline numbers for Ares Commercial Real Estate (ACRE) give insight into how the company performed in the quarter ended December 2024, but it may be worthwhile to compare some of its key metrics to Wall Street estimates and the year-ago actuals.
Ares Commercial Real Estate (ACRE) Reports Q4 Loss, Lags Revenue Estimates
Ares Commercial Real Estate (ACRE) came out with a quarterly loss of $0.15 per share versus the Zacks Consensus Estimate of $0.06. This compares to earnings of $0.20 per share a year ago.
