Analyzing Ares Commercial Real Estate (NYSE:ACRE) and CV (OTCMKTS:CVHL)

CV (OTCMKTS:CVHL) and Ares Commercial Real Estate (NYSE:ACRE) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, institutional ownership and valuation.

Volatility & Risk

CV has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500. Comparatively, Ares Commercial Real Estate has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.

Institutional and Insider Ownership

41.3% of Ares Commercial Real Estate shares are owned by institutional investors. 7.6% of CV shares are owned by insiders. Comparatively, 2.3% of Ares Commercial Real Estate shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares CV and Ares Commercial Real Estate”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CV	$25.67 million	N/A	-$18.15 million	N/A	N/A
Ares Commercial Real Estate	$54.83 million	5.42	-$900,000.00	($0.02)	-268.25

Ares Commercial Real Estate has higher revenue and earnings than CV.

Analyst Recommendations

This is a summary of recent ratings for CV and Ares Commercial Real Estate, as provided by MarketBeat.com.

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

Ares Commercial Real Estate has a consensus target price of $5.38, suggesting a potential upside of 0.19%. Given Ares Commercial Real Estate’s stronger consensus rating and higher probable upside, analysts clearly believe Ares Commercial Real Estate is more favorable than CV.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CV	N/A	N/A	N/A
Ares Commercial Real Estate	-1.64%	-1.99%	-0.70%

Summary

Ares Commercial Real Estate beats CV on 6 of the 11 factors compared between the two stocks.

About CV

CV Holdings, Inc. operates as a specialty finance company. It owns finance platforms across various businesses, including small-ticket equipment financing and commercial real estate bridge lending. CV Holdings, Inc. was incorporated in 2005 and is based in Newport Beach, California.

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.