Sunrise Realty Trust (NASDAQ:SUNS – Get Free Report) and Ares Commercial Real Estate (NYSE:ACRE – Get Free Report) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.
Dividends
Sunrise Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 20.5%. Ares Commercial Real Estate pays an annual dividend of $0.60 per share and has a dividend yield of 16.9%. Sunrise Realty Trust pays out 123.7% 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 -750.0% of its earnings in the form of a dividend.
Analyst Ratings
This is a summary of current ratings and recommmendations for Sunrise Realty Trust and Ares Commercial Real Estate, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sunrise Realty Trust | 1 | 3 | 0 | 0 | 1.75 |
| Ares Commercial Real Estate | 2 | 4 | 1 | 0 | 1.86 |
Profitability
This table compares Sunrise Realty Trust and Ares Commercial Real Estate’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sunrise Realty Trust | 53.33% | 8.25% | 4.90% |
| Ares Commercial Real Estate | -8.04% | 4.08% | 1.23% |
Institutional & Insider Ownership
41.3% of Ares Commercial Real Estate shares are owned by institutional investors. 28.5% of Sunrise Realty Trust 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 hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk and Volatility
Sunrise Realty Trust has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, Ares Commercial Real Estate has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.
Earnings & Valuation
This table compares Sunrise Realty Trust 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 | |
| Sunrise Realty Trust | $21.57 million | 3.67 | $12.14 million | $0.97 | 6.03 |
| Ares Commercial Real Estate | $52.91 million | 3.72 | -$900,000.00 | ($0.08) | -44.31 |
Sunrise Realty Trust has higher earnings, but lower revenue than Ares Commercial Real Estate. Ares Commercial Real Estate is trading at a lower price-to-earnings ratio than Sunrise Realty Trust, indicating that it is currently the more affordable of the two stocks.
About Sunrise Realty Trust
Sunrise Realty Trust, Inc. engages in commercial real estate (CRE) lending business. It focuses on originating CRE debt investments and providing capital to borrowers and sponsors with transitional business plans collateralized by CRE assets. The company intends to create a diversified investment portfolio, targeting investments in senior mortgage loans, mezzanine loans, whole loans, B-notes, CMBS, and debt-like preferred equity securities across CRE asset classes. Sunrise Realty Trust, Inc. was incorporated in 2023 and is based in West Palm Beach, Florida.
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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