Ares Commercial Real Estate Corporation to Issue Quarterly Dividend of $0.15 (NYSE:ACRE)

Key Points

• Ares Commercial Real Estate declared a quarterly dividend of $0.15 per share, payable October 15 to shareholders of record September 30, implying a $0.60 annualized dividend and a 13.0% yield.
• The dividend appears financially strained: the company has a 260.9% payout ratio, while next year’s projected earnings of $0.54 per share would cover only part of the expected $0.60 annual dividend.
• ACRE shares rose 8.8% to $4.62 after the REIT reported quarterly EPS of $0.12, beating estimates of $0.04, though analyst sentiment remains cautious with a consensus “Reduce” rating and a $5.25 price target.

Ares Commercial Real Estate Corporation (NYSE:ACRE - Get Free Report) announced a quarterly dividend on Tuesday, August 4th. Stockholders of record on Wednesday, September 30th will be paid a dividend of 0.15 per share by the real estate investment trust on Thursday, October 15th. This represents a c) annualized dividend and a dividend yield of 13.0%. The ex-dividend date is Wednesday, September 30th.

Ares Commercial Real Estate has decreased its dividend payment by an average of 0.1%per year over the last three years. Ares Commercial Real Estate has a payout ratio of 260.9% meaning the company cannot currently cover its dividend with earnings alone and is relying on its balance sheet to cover its dividend payments. Equities analysts expect Ares Commercial Real Estate to earn $0.54 per share next year, which means the company may not be able to cover its $0.60 annual dividend with an expected future payout ratio of 111.1%.

Ares Commercial Real Estate Stock Up 8.8%

Shares of NYSE:ACRE traded up $0.37 during midday trading on Tuesday, reaching $4.62. 1,492,066 shares of the company were exchanged, compared to its average volume of 478,588. Ares Commercial Real Estate has a fifty-two week low of $4.05 and a fifty-two week high of $5.89. The stock has a fifty day simple moving average of $4.64 and a two-hundred day simple moving average of $4.90. The firm has a market cap of $256.43 million, a PE ratio of -12.84 and a beta of 1.15.

Ares Commercial Real Estate (NYSE:ACRE - Get Free Report) last posted its quarterly earnings data on Monday, August 3rd. The real estate investment trust reported $0.12 EPS for the quarter, beating the consensus estimate of $0.04 by $0.08. The business had revenue of $14.36 million for the quarter, compared to analysts' expectations of $10.96 million. Ares Commercial Real Estate had a negative net margin of 37.21% and a negative return on equity of 2.80%. As a group, analysts forecast that Ares Commercial Real Estate will post 0.4 earnings per share for the current year.

Wall Street Analysts Forecast Growth

A number of analysts have recently commented on ACRE shares. Zacks Research upgraded Ares Commercial Real Estate from a "strong sell" rating to a "hold" rating in a report on Friday, July 10th. Wall Street Zen downgraded Ares Commercial Real Estate from a "hold" rating to a "sell" rating in a report on Sunday. UBS Group began coverage on Ares Commercial Real Estate in a research report on Tuesday, June 2nd. They issued a "neutral" rating and a $5.50 target price on the stock. Keefe, Bruyette & Woods cut their target price on Ares Commercial Real Estate from $6.00 to $5.50 and set an "outperform" rating on the stock in a research note on Wednesday, May 13th. Finally, JPMorgan Chase & Co. reduced their price target on Ares Commercial Real Estate from $5.50 to $5.00 and set a "neutral" rating for the company in a research report on Friday, July 17th. One research analyst has rated the stock with a Buy rating, four have issued a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat.com, the stock has an average rating of "Reduce" and a consensus price target of $5.25.

Ares Commercial Real Estate Company Profile

Ares Commercial Real Estate Corporation NYSE: ACRE is a publicly traded real estate investment trust (REIT) primarily focused on commercial real estate debt investments. Externally managed by an affiliate of Ares Management Corporation, ACRE seeks to generate attractive risk-adjusted returns through its diversified portfolio of CRE financing strategies. The company specializes in originating, acquiring, financing and managing first mortgages, mezzanine loans, preferred equity and other structured finance products.

Since its inception, Ares Commercial Real Estate has targeted a broad range of property types, including multifamily, office, industrial, retail and hospitality assets.

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