Ares Commercial: You've Been Warned About This 13.4% Yield

The Asian Investor
29.35K Followers

Summary

  • Ares Commercial Real Estate's dividend yield has risen above 13% which reflects increased risks in the commercial mortgage lending market.
  • The REIT's heavy investments in the office market pose a significant risk to the REIT's earnings.
  • The increase in loan loss reserves and the discount to book value justify a downgrade of Ares Commercial Real Estate from buy to hold.
  • A dividend cut may loom if market conditions and dividend trends don't improve.

Looking directly up at the skyline of the financial

Megapixel8

Ares Commercial Real Estate (NYSE:ACRE) is a leader in the market for the origination of commercial real estate debt. Most recently, the stock's dividend yield has crossed above 13%, indicating that dividend risks for the commercial mortgage lender have increased, largely

This article was written by

29.35K Followers
I am interested in a lot of technology and AI stocks like Google, Nvidia, AMD, Tesla and Amazon.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of STWD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About ACRE Stock

SymbolLast Price% Chg
EPS
PE
Div Rate
Yield
Short Interest
Market Cap
Volume
Compare to Peers

More on ACRE

Related Stocks

SymbolLast Price% Chg
ACRE
--