Cousins Properties (NYSE:CUZ – Get Free Report) and Ares Commercial Real Estate (NYSE:ACRE – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.
Dividends
Cousins Properties pays an annual dividend of $1.28 per share and has a dividend yield of 4.0%. Ares Commercial Real Estate pays an annual dividend of $1.00 per share and has a dividend yield of 14.0%. Cousins Properties pays out 387.9% 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 pays out -84.7% of its earnings in the form of a dividend. Ares Commercial Real Estate is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares Cousins Properties and Ares Commercial Real Estate”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Cousins Properties | $828.41 million | 5.83 | $82.96 million | $0.33 | 96.12 |
| Ares Commercial Real Estate | $88.96 million | 4.37 | -$38.87 million | ($1.18) | -6.03 |
Institutional and Insider Ownership
94.4% of Cousins Properties shares are held by institutional investors. Comparatively, 41.3% of Ares Commercial Real Estate shares are held by institutional investors. 1.4% of Cousins Properties shares are held by insiders. Comparatively, 2.8% of Ares Commercial Real Estate shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Volatility and Risk
Cousins Properties has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, Ares Commercial Real Estate has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500.
Profitability
This table compares Cousins Properties and Ares Commercial Real Estate’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Cousins Properties | 6.17% | 1.14% | 0.66% |
| Ares Commercial Real Estate | -95.81% | -5.10% | -1.44% |
Analyst Recommendations
This is a breakdown of recent ratings and price targets for Cousins Properties and Ares Commercial Real Estate, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cousins Properties | 0 | 1 | 5 | 0 | 2.83 |
| Ares Commercial Real Estate | 2 | 5 | 0 | 0 | 1.71 |
Cousins Properties currently has a consensus price target of $31.50, suggesting a potential downside of 0.69%. Ares Commercial Real Estate has a consensus price target of $7.10, suggesting a potential downside of 0.28%. Given Ares Commercial Real Estate’s higher probable upside, analysts plainly believe Ares Commercial Real Estate is more favorable than Cousins Properties.
Summary
Cousins Properties beats Ares Commercial Real Estate on 11 of the 16 factors compared between the two stocks.
About Cousins Properties
Cousins Properties Incorporated ("Cousins") is a fully integrated, self-administered, and self-managed real estate investment trust (REIT). The Company, based in Atlanta and acting through its operating partnership, Cousins Properties LP, primarily invests in Class A office buildings located in high-growth Sun Belt markets. Founded in 1958, Cousins creates shareholder value through its extensive expertise in the development, acquisition, leasing, and management of high-quality real estate assets. The Company has a comprehensive strategy in place based on a simple platform, trophy assets, and opportunistic investments.
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.
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