ARES CAPITAL CORP (ARCC) Stock Fundamental Analysis
NASDAQ:ARCC - Nasdaq - US04010L1035 - Common Stock - Currency: USD
Taking everything into account, ARCC scores 3 out of 10 in our fundamental rating. ARCC was compared to 237 industry peers in the Capital Markets industry. ARCC has a medium profitability rating, but doesn't score so well on its financial health evaluation. ARCC has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
ARCC had positive earnings in the past year.
ARCC had a negative operating cash flow in the past year.
ARCC had positive earnings in each of the past 5 years.
ARCC had negative operating cash flow in 4 of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 4.65%, ARCC is doing good in the industry, outperforming 65.82% of the companies in the same industry.
Looking at the Return On Equity, with a value of 9.64%, ARCC is in line with its industry, outperforming 58.23% of the companies in the same industry.
ARCC has a Return On Invested Capital of 4.09%. This is comparable to the rest of the industry: ARCC outperforms 51.90% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ARCC is below the industry average of 7.88%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.65% | ||
| ROE | 9.64% | ||
| ROIC | 4.09% |
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
The Profit Margin of ARCC (44.94%) is better than 88.19% of its industry peers.
In the last couple of years the Profit Margin of ARCC has remained more or less at the same level.
ARCC's Operating Margin of 48.72% is amongst the best of the industry. ARCC outperforms 83.12% of its industry peers.
In the last couple of years the Operating Margin of ARCC has declined.
ARCC has a Gross Margin (50.28%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of ARCC has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 48.72% | ||
| PM (TTM) | 44.94% | ||
| GM | 50.28% |
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.
ARCC has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ARCC has an improved debt to assets ratio.
2.2 Solvency
ARCC has an Altman-Z score of 0.94. This is a bad value and indicates that ARCC is not financially healthy and even 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 50.63% of its industry peers.
ARCC has a Debt/Equity ratio of 1.01. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of ARCC (1.01) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.01 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.94 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 1.07 indicates that ARCC should not have too much problems paying its short term obligations.
The Current ratio of ARCC (1.07) is comparable to the rest of the industry.
A Quick Ratio of 1.07 indicates that ARCC should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.07, ARCC is in line with its industry, outperforming 50.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
The earnings per share for ARCC have decreased strongly by -11.98% 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.
ARCC shows a small growth in Revenue. In the last year, the Revenue has grown by 6.85%.
The Revenue has been growing by 14.37% on average over the past years. This is quite good.
EPS 1Y (TTM)-11.98%
EPS 3Y5.05%
EPS 5Y4.06%
EPS Q2Q%-18.03%
Revenue 1Y (TTM)6.85%
Revenue growth 3Y18%
Revenue growth 5Y14.37%
Sales Q2Q%7.02%
3.2 Future
ARCC is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -4.81% yearly.
Based on estimates for the next years, ARCC will show a small growth in Revenue. The Revenue will grow by 4.01% on average per year.
EPS Next Y-11.06%
EPS Next 2Y-6.67%
EPS Next 3Y-4.81%
EPS Next 5YN/A
Revenue Next Year-0.06%
Revenue Next 2Y2.69%
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 10.54, the valuation of ARCC can be described as reasonable.
ARCC's Price/Earnings ratio is a bit cheaper when compared to the industry. ARCC is cheaper than 70.46% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.03, ARCC is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 11.06, the valuation of ARCC can be described as reasonable.
Based on the Price/Forward Earnings ratio, ARCC is valued a bit cheaper than 67.09% of the companies in the same industry.
ARCC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 36.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.54 | ||
| Fwd PE | 11.06 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
ARCC's earnings are expected to decrease with -4.81% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)2.6
EPS Next 2Y-6.67%
EPS Next 3Y-4.81%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 8.57%, ARCC is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 8.25, ARCC pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.40, ARCC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.57% |
5.2 History
The dividend of ARCC has a limited annual growth rate of 2.32%.
ARCC has paid a dividend for at least 10 years, which is 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
ARCC pays out 89.80% of its income as dividend. 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.
DP89.8%
EPS Next 2Y-6.67%
EPS Next 3Y-4.81%
NASDAQ:ARCC (8/6/2025, 1:58:05 PM)
22.4535
-0.03 (-0.12%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners32.03%
Inst Owner Change19.09%
Ins Owners0.48%
Ins Owner Change-7.9%
Market Cap15.84B
Analysts84
Price Target23.72 (5.64%)
Short Float %2.11%
Short Ratio4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.57% |
Yearly Dividend1.82
Dividend Growth(5Y)2.32%
DP89.8%
Div Incr Years0
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-6.01%
Min EPS beat(2)-8.8%
Max EPS beat(2)-3.22%
EPS beat(4)0
Avg EPS beat(4)-5.78%
Min EPS beat(4)-8.8%
Max EPS beat(4)-3.22%
EPS beat(8)2
Avg EPS beat(8)-2.59%
EPS beat(12)4
Avg EPS beat(12)-1.36%
EPS beat(16)7
Avg EPS beat(16)-0.34%
Revenue beat(2)1
Avg Revenue beat(2)-1.26%
Min Revenue beat(2)-7.65%
Max Revenue beat(2)5.13%
Revenue beat(4)1
Avg Revenue beat(4)-2.41%
Min Revenue beat(4)-7.65%
Max Revenue beat(4)5.13%
Revenue beat(8)3
Avg Revenue beat(8)0.29%
Revenue beat(12)5
Avg Revenue beat(12)0.84%
Revenue beat(16)8
Avg Revenue beat(16)0.93%
PT rev (1m)0.6%
PT rev (3m)-1.11%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.55%
EPS NY rev (1m)0%
EPS NY rev (3m)-6.12%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.49%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-5.93%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.54 | ||
| Fwd PE | 11.06 | ||
| P/S | 5.26 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.13 | ||
| P/tB | 1.13 | ||
| EV/EBITDA | N/A |
EPS(TTM)2.13
EY9.49%
EPS(NY)2.03
Fwd EY9.04%
FCF(TTM)-1.85
FCFYN/A
OCF(TTM)-1.85
OCFYN/A
SpS4.27
BVpS19.9
TBVpS19.9
PEG (NY)N/A
PEG (5Y)2.6
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.65% | ||
| ROE | 9.64% | ||
| ROCE | 5.17% | ||
| ROIC | 4.09% | ||
| ROICexc | 4.15% | ||
| ROICexgc | 4.18% | ||
| OM | 48.72% | ||
| PM (TTM) | 44.94% | ||
| GM | 50.28% | ||
| 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 Turnover0.1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.01 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 2.02 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 | ||
| 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)-11.98%
EPS 3Y5.05%
EPS 5Y4.06%
EPS Q2Q%-18.03%
EPS Next Y-11.06%
EPS Next 2Y-6.67%
EPS Next 3Y-4.81%
EPS Next 5YN/A
Revenue 1Y (TTM)6.85%
Revenue growth 3Y18%
Revenue growth 5Y14.37%
Sales Q2Q%7.02%
Revenue Next Year-0.06%
Revenue Next 2Y2.69%
Revenue Next 3Y4.01%
Revenue Next 5YN/A
EBIT growth 1Y6.54%
EBIT growth 3Y24.22%
EBIT growth 5Y12.28%
EBIT Next Year-98.78%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-369.83%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-369.83%
OCF growth 3YN/A
OCF growth 5YN/A