Critical Contrast: AGNC Investment (NASDAQ:AGNCZ) & Ares Commercial Real Estate (NYSE:ACRE)

Ares Commercial Real Estate (NYSE:ACRE) and AGNC Investment (NASDAQ:AGNCZ) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Ares Commercial Real Estate and AGNC Investment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ares Commercial Real Estate	2	4	1	0	1.86
AGNC Investment	0	0	0	0	0.00

Ares Commercial Real Estate currently has a consensus target price of $5.25, suggesting a potential upside of 18.64%. Given Ares Commercial Real Estate’s stronger consensus rating and higher probable upside, research analysts clearly believe Ares Commercial Real Estate is more favorable than AGNC Investment.

Insider & Institutional Ownership

41.3% of Ares Commercial Real Estate shares are held by institutional investors. 2.3% 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.

Earnings & Valuation

This table compares Ares Commercial Real Estate and AGNC Investment”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ares Commercial Real Estate	$18.12 million	13.55	-$900,000.00	($0.36)	-12.29
AGNC Investment	$1.60 billion	N/A	N/A	N/A	N/A

AGNC Investment has higher revenue and earnings than Ares Commercial Real Estate.

Profitability

This table compares Ares Commercial Real Estate and AGNC Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ares Commercial Real Estate	-37.21%	-2.80%	-0.91%
AGNC Investment	N/A	N/A	N/A

Summary

Ares Commercial Real Estate beats AGNC Investment on 5 of the 9 factors compared between the two stocks.

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.