ARES CAPITAL CORP (ARCC) Stock Fundamental Analysis
NASDAQ:ARCC - Nasdaq - US04010L1035 - Common Stock - Currency: USD
Overall ARCC gets a fundamental rating of 4 out of 10. We evaluated ARCC against 232 industry peers in the Capital Markets industry. There are concerns on the financial health of ARCC while its profitability can be described as average. ARCC is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
ARCC had positive earnings in the past year.
In the past year ARCC has reported a negative cash flow from operations.
In the past 5 years ARCC has always been profitable.
In the past 5 years ARCC reported 4 times negative operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 4.64%, ARCC is doing good in the industry, outperforming 65.09% of the companies in the same industry.
Looking at the Return On Equity, with a value of 9.61%, ARCC is in line with its industry, outperforming 55.60% of the companies in the same industry.
With a Return On Invested Capital value of 4.34%, ARCC perfoms like the industry average, outperforming 53.88% of the companies in the same industry.
ARCC had an Average Return On Invested Capital over the past 3 years of 4.28%. This is below the industry average of 7.87%.
The 3 year average ROIC (4.28%) for ARCC is below the current ROIC(4.34%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.64% | ||
| ROE | 9.61% | ||
| ROIC | 4.34% |
ROA(3y)4.82%
ROA(5y)4.99%
ROE(3y)10.42%
ROE(5y)11.14%
ROIC(3y)4.28%
ROIC(5y)4%
1.3 Margins
With an excellent Profit Margin value of 43.50%, ARCC belongs to the best of the industry, outperforming 86.21% of the companies in the same industry.
ARCC's Profit Margin has been stable in the last couple of years.
ARCC has a better Operating Margin (50.18%) than 85.78% of its industry peers.
In the last couple of years the Operating Margin of ARCC has declined.
Looking at the Gross Margin, with a value of 51.67%, ARCC is in line with its industry, outperforming 56.90% of the companies in the same industry.
ARCC's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 50.18% | ||
| PM (TTM) | 43.5% | ||
| GM | 51.67% |
OM growth 3Y5.28%
OM growth 5Y-1.82%
PM growth 3Y-16.07%
PM growth 5Y-0.39%
GM growth 3Y4.55%
GM growth 5Y-1.61%
2. Health
2.1 Basic Checks
The number of shares outstanding for ARCC has been increased compared to 1 year ago.
The number of shares outstanding for ARCC has been increased compared to 5 years ago.
The debt/assets ratio for ARCC has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.94, we must say that ARCC is in the distress zone and has some risk of bankruptcy.
ARCC has a Altman-Z score of 0.94. This is comparable to the rest of the industry: ARCC outperforms 49.57% of its industry peers.
ARCC has a Debt/Equity ratio of 1.02. This is a high value indicating a heavy dependency on external financing.
ARCC has a Debt to Equity ratio of 1.02. This is comparable to the rest of the industry: ARCC outperforms 48.28% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.94 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
ARCC has a Current Ratio of 1.27. This is a normal value and indicates that ARCC is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of ARCC (1.27) is comparable to the rest of the industry.
ARCC has a Quick Ratio of 1.27. This is a normal value and indicates that ARCC is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of ARCC (1.27) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.27 |
3. Growth
3.1 Past
The earnings per share for ARCC have decreased by -6.28% in the last year.
Measured over the past 5 years, ARCC shows a small growth in Earnings Per Share. The EPS has been growing by 4.06% on average per year.
Looking at the last year, ARCC shows a quite strong growth in Revenue. The Revenue has grown by 12.01% in the last year.
Measured over the past years, ARCC shows a quite strong growth in Revenue. The Revenue has been growing by 14.37% on average per year.
EPS 1Y (TTM)-6.28%
EPS 3Y5.05%
EPS 5Y4.06%
EPS Q2Q%-15.25%
Revenue 1Y (TTM)12.01%
Revenue growth 3Y18%
Revenue growth 5Y14.37%
Sales Q2Q%4.42%
3.2 Future
ARCC is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -1.40% yearly.
The Revenue is expected to grow by 4.01% on average over the next years.
EPS Next Y-9.62%
EPS Next 2Y-6.38%
EPS Next 3Y-1.4%
EPS Next 5YN/A
Revenue Next Year-0.06%
Revenue Next 2Y2.76%
Revenue Next 3Y4.01%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 9.59, the valuation of ARCC can be described as reasonable.
Based on the Price/Earnings ratio, ARCC is valued a bit cheaper than the industry average as 72.84% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.34, ARCC is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 10.52, the valuation of ARCC can be described as reasonable.
Based on the Price/Forward Earnings ratio, ARCC is valued a bit cheaper than the industry average as 65.52% of the companies are valued more expensively.
ARCC is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.19, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.59 | ||
| Fwd PE | 10.52 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)2.36
EPS Next 2Y-6.38%
EPS Next 3Y-1.4%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 8.62%, ARCC is a good candidate for dividend investing.
ARCC's Dividend Yield is a higher than the industry average which is at 7.91.
ARCC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.62% |
5.2 History
The dividend of ARCC has a limited annual growth rate of 2.32%.
ARCC has been paying a dividend for at least 10 years, so it has a reliable track record.
ARCC has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)2.32%
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
89.57% of the earnings are spent on dividend by ARCC. This is not a sustainable payout ratio.
ARCC's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP89.57%
EPS Next 2Y-6.38%
EPS Next 3Y-1.4%
NASDAQ:ARCC (6/20/2025, 1:07:09 PM)
21.48
-0.03 (-0.14%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners32.03%
Inst Owner Change8.17%
Ins Owners0.48%
Ins Owner Change-7.9%
Market Cap14.91B
Analysts83
Price Target23.09 (7.5%)
Short Float %2.32%
Short Ratio3.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.62% |
Yearly Dividend1.82
Dividend Growth(5Y)2.32%
DP89.57%
Div Incr Years0
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-7.74%
Min EPS beat(2)-8.8%
Max EPS beat(2)-6.69%
EPS beat(4)1
Avg EPS beat(4)-4.27%
Min EPS beat(4)-8.8%
Max EPS beat(4)2.86%
EPS beat(8)3
Avg EPS beat(8)-2.17%
EPS beat(12)5
Avg EPS beat(12)-0.91%
EPS beat(16)8
Avg EPS beat(16)1.21%
Revenue beat(2)0
Avg Revenue beat(2)-6.45%
Min Revenue beat(2)-7.65%
Max Revenue beat(2)-5.25%
Revenue beat(4)1
Avg Revenue beat(4)-2.82%
Min Revenue beat(4)-7.65%
Max Revenue beat(4)3.48%
Revenue beat(8)2
Avg Revenue beat(8)-0.36%
Revenue beat(12)5
Avg Revenue beat(12)0.51%
Revenue beat(16)8
Avg Revenue beat(16)1.62%
PT rev (1m)0%
PT rev (3m)-2.64%
EPS NQ rev (1m)-1.41%
EPS NQ rev (3m)-6.44%
EPS NY rev (1m)0%
EPS NY rev (3m)-5.37%
Revenue NQ rev (1m)-2.7%
Revenue NQ rev (3m)-5.26%
Revenue NY rev (1m)-2.72%
Revenue NY rev (3m)-5.93%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.59 | ||
| Fwd PE | 10.52 | ||
| P/S | 4.94 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.09 | ||
| P/tB | 1.09 | ||
| EV/EBITDA | N/A |
EPS(TTM)2.24
EY10.43%
EPS(NY)2.04
Fwd EY9.51%
FCF(TTM)-3.47
FCFYN/A
OCF(TTM)-3.47
OCFYN/A
SpS4.35
BVpS19.7
TBVpS19.7
PEG (NY)N/A
PEG (5Y)2.36
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.64% | ||
| ROE | 9.61% | ||
| ROCE | 5.49% | ||
| ROIC | 4.34% | ||
| ROICexc | 4.44% | ||
| ROICexgc | 4.47% | ||
| OM | 50.18% | ||
| PM (TTM) | 43.5% | ||
| GM | 51.67% | ||
| FCFM | N/A |
ROA(3y)4.82%
ROA(5y)4.99%
ROE(3y)10.42%
ROE(5y)11.14%
ROIC(3y)4.28%
ROIC(5y)4%
ROICexc(3y)4.37%
ROICexc(5y)4.08%
ROICexgc(3y)4.39%
ROICexgc(5y)4.1%
ROCE(3y)5.42%
ROCE(5y)5.06%
ROICexcg growth 3Y12.39%
ROICexcg growth 5Y-0.77%
ROICexc growth 3Y12.35%
ROICexc growth 5Y-0.78%
OM growth 3Y5.28%
OM growth 5Y-1.82%
PM growth 3Y-16.07%
PM growth 5Y-0.39%
GM growth 3Y4.55%
GM growth 5Y-1.61%
F-Score2
Asset Turnover0.11
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 2.24 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.27 | ||
| Altman-Z | 0.94 |
F-Score2
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-6.28%
EPS 3Y5.05%
EPS 5Y4.06%
EPS Q2Q%-15.25%
EPS Next Y-9.62%
EPS Next 2Y-6.38%
EPS Next 3Y-1.4%
EPS Next 5YN/A
Revenue 1Y (TTM)12.01%
Revenue growth 3Y18%
Revenue growth 5Y14.37%
Sales Q2Q%4.42%
Revenue Next Year-0.06%
Revenue Next 2Y2.76%
Revenue Next 3Y4.01%
Revenue Next 5YN/A
EBIT growth 1Y16.8%
EBIT growth 3Y24.22%
EBIT growth 5Y12.28%
EBIT Next Year-98.78%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-148.55%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-148.55%
OCF growth 3YN/A
OCF growth 5YN/A