ARES CAPITAL CORP (ARCC) Stock Fundamental Analysis
NASDAQ:ARCC - US04010L1035 - Common Stock
22.405 USD
+0.16 (+0.7%)
Taking everything into account, ARCC scores 3 out of 10 in our fundamental rating. ARCC was compared to 238 industry peers in the Capital Markets industry. While ARCC is still in line with the averages on profitability rating, there are concerns on its financial health. ARCC has a valuation in line with the averages, 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.
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
Looking at the Return On Assets, with a value of 4.65%, ARCC is in the better half of the industry, outperforming 66.81% of the companies in the same industry.
ARCC has a Return On Equity (9.64%) which is in line with its industry peers.
ARCC has a Return On Invested Capital (4.09%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for ARCC is below the industry average of 7.60%.
| 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
ARCC has a Profit Margin of 44.94%. This is amongst the best in the industry. ARCC outperforms 89.08% of its industry peers.
ARCC's Profit Margin has been stable in the last couple of years.
ARCC has a Operating Margin of 48.72%. This is amongst the best in the industry. ARCC outperforms 82.77% of its industry peers.
ARCC's Operating Margin has declined in the last couple of years.
The Gross Margin of ARCC (50.28%) is comparable to the rest of the industry.
ARCC's Gross Margin has declined in the last couple of years.
| 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
Compared to 1 year ago, ARCC has more shares outstanding
The number of shares outstanding for ARCC has been increased compared to 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 51.68% 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
ARCC has a Current Ratio of 1.07. This is a normal value and indicates that ARCC is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.07, ARCC perfoms like the industry average, outperforming 44.54% of the companies in the same industry.
ARCC has a Quick Ratio of 1.07. This is a normal value and indicates that ARCC is financially healthy and should not expect problems in meeting its short term obligations.
ARCC has a Quick ratio (1.07) which is comparable to the rest of the 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.
Looking at the last year, ARCC shows a small growth in Revenue. The Revenue has grown by 6.85% 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)-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 -5.50% yearly.
The Revenue is expected to grow by 4.64% on average over the next years.
EPS Next Y-11.9%
EPS Next 2Y-7.03%
EPS Next 3Y-5.5%
EPS Next 5YN/A
Revenue Next Year0.29%
Revenue Next 2Y2.66%
Revenue Next 3Y4.64%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 10.52, the valuation of ARCC can be described as reasonable.
71.43% of the companies in the same industry are more expensive than ARCC, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of ARCC to the average of the S&P500 Index (27.17), we can say ARCC is valued rather cheaply.
The Price/Forward Earnings ratio is 11.12, which indicates a very decent valuation of ARCC.
66.81% of the companies in the same industry are more expensive than ARCC, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.78, ARCC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.52 | ||
| Fwd PE | 11.12 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
A cheap valuation may be justified as ARCC's earnings are expected to decrease with -5.50% in the coming years.
PEG (NY)N/A
PEG (5Y)2.59
EPS Next 2Y-7.03%
EPS Next 3Y-5.5%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 8.63%, ARCC is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 8.00, ARCC pays a bit more dividend than its industry peers.
ARCC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.63% |
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-7.03%
EPS Next 3Y-5.5%
NASDAQ:ARCC (8/29/2025, 11:38:58 AM)
22.405
+0.16 (+0.7%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners31.31%
Inst Owner Change21.6%
Ins Owners0.47%
Ins Owner Change1.24%
Market Cap15.80B
Analysts84
Price Target23.76 (6.05%)
Short Float %2.26%
Short Ratio4.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.63% |
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)1.67%
PT rev (3m)2.89%
EPS NQ rev (1m)-1.09%
EPS NQ rev (3m)-7.41%
EPS NY rev (1m)-0.94%
EPS NY rev (3m)-2.52%
Revenue NQ rev (1m)0.92%
Revenue NQ rev (3m)-5.22%
Revenue NY rev (1m)0.36%
Revenue NY rev (3m)-2.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.52 | ||
| Fwd PE | 11.12 | ||
| P/S | 5.25 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.13 | ||
| P/tB | 1.13 | ||
| EV/EBITDA | N/A |
EPS(TTM)2.13
EY9.51%
EPS(NY)2.01
Fwd EY8.99%
FCF(TTM)-1.85
FCFYN/A
OCF(TTM)-1.85
OCFYN/A
SpS4.27
BVpS19.9
TBVpS19.9
PEG (NY)N/A
PEG (5Y)2.59
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-11.9%
EPS Next 2Y-7.03%
EPS Next 3Y-5.5%
EPS Next 5YN/A
Revenue 1Y (TTM)6.85%
Revenue growth 3Y18%
Revenue growth 5Y14.37%
Sales Q2Q%7.02%
Revenue Next Year0.29%
Revenue Next 2Y2.66%
Revenue Next 3Y4.64%
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