ARES CAPITAL CORP (ARCC) Stock Fundamental Analysis
USA - NASDAQ:ARCC - US04010L1035 - Common Stock
20.11 USD
-0.16 (-0.79%)
Taking everything into account, ARCC scores 4 out of 10 in our fundamental rating. ARCC was compared to 237 industry peers in the Capital Markets industry. Both the profitability and the financial health of ARCC get a neutral evaluation. Nothing too spectacular is happening here. 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.
ARCC had a negative operating cash flow in the past year.
Each year in the past 5 years ARCC has been profitable.
In the past 5 years ARCC reported 4 times negative operating cash flow.
1.2 Ratios
ARCC has a Return On Assets of 4.42%. This is in the better half of the industry: ARCC outperforms 65.40% of its industry peers.
The Return On Equity of ARCC (9.52%) is comparable to the rest of the industry.
ARCC has a Return On Invested Capital (3.79%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for ARCC is below the industry average of 7.63%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.42% | ||
| ROE | 9.52% | ||
| ROIC | 3.79% |
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's Profit Margin of 45.16% is amongst the best of the industry. ARCC outperforms 87.76% 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 47.81% 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 of 49.47%. This is comparable to the rest of the industry: ARCC outperforms 58.23% of its industry peers.
In the last couple of years the Gross Margin of ARCC has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 47.81% | ||
| PM (TTM) | 45.16% | ||
| GM | 49.47% |
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.
Compared to 5 years ago, ARCC has more shares outstanding
ARCC has a better debt/assets ratio than last year.
2.2 Solvency
ARCC has an Altman-Z score of 0.85. This is a bad value and indicates that ARCC is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.85, ARCC is in line with its industry, outperforming 47.68% of the companies in the same industry.
ARCC has a Debt/Equity ratio of 1.09. This is a high value indicating a heavy dependency on external financing.
ARCC has a Debt to Equity ratio (1.09) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.09 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.85 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 2.23 indicates that ARCC has no problem at all paying its short term obligations.
The Current ratio of ARCC (2.23) is better than 74.68% of its industry peers.
A Quick Ratio of 2.23 indicates that ARCC has no problem at all paying its short term obligations.
ARCC's Quick ratio of 2.23 is fine compared to the rest of the industry. ARCC outperforms 74.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.23 | ||
| Quick Ratio | 2.23 |
3. Growth
3.1 Past
ARCC shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -14.94%.
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 2.72% in the last year.
ARCC shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.37% yearly.
EPS 1Y (TTM)-14.94%
EPS 3Y5.05%
EPS 5Y4.06%
EPS Q2Q%-13.79%
Revenue 1Y (TTM)2.72%
Revenue growth 3Y18%
Revenue growth 5Y14.37%
Sales Q2Q%18.71%
3.2 Future
Based on estimates for the next years, ARCC will show a decrease in Earnings Per Share. The EPS will decrease by -5.46% on average per year.
The Revenue is expected to grow by 3.59% on average over the next years.
EPS Next Y-12.04%
EPS Next 2Y-7.38%
EPS Next 3Y-5.46%
EPS Next 5YN/A
Revenue Next Year0.75%
Revenue Next 2Y2.9%
Revenue Next 3Y3.59%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
ARCC is valuated reasonably with a Price/Earnings ratio of 9.81.
Based on the Price/Earnings ratio, ARCC is valued a bit cheaper than the industry average as 71.31% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.03, ARCC is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 10.06, the valuation of ARCC can be described as reasonable.
67.93% of the companies in the same industry are more expensive than ARCC, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.27. ARCC is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.81 | ||
| Fwd PE | 10.06 |
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 -5.46% in the coming years.
PEG (NY)N/A
PEG (5Y)2.42
EPS Next 2Y-7.38%
EPS Next 3Y-5.46%
5. Dividend
5.1 Amount
ARCC has a Yearly Dividend Yield of 9.41%, which is a nice return.
ARCC's Dividend Yield is a higher than the industry average which is at 8.50.
Compared to an average S&P500 Dividend Yield of 2.38, ARCC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.41% |
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
91.56% 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.
DP91.56%
EPS Next 2Y-7.38%
EPS Next 3Y-5.46%
NASDAQ:ARCC (11/5/2025, 9:52:56 AM)
20.11
-0.16 (-0.79%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners32.38%
Inst Owner Change-17.04%
Ins Owners0.47%
Ins Owner Change0%
Market Cap14.18B
Revenue(TTM)3.02B
Net Income(TTM)1.36B
Analysts83.81
Price Target23.5 (16.86%)
Short Float %2.14%
Short Ratio2.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.41% |
Yearly Dividend1.82
Dividend Growth(5Y)2.32%
DP91.56%
Div Incr Years0
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.82%
Min EPS beat(2)-3.22%
Max EPS beat(2)-2.41%
EPS beat(4)0
Avg EPS beat(4)-5.28%
Min EPS beat(4)-8.8%
Max EPS beat(4)-2.41%
EPS beat(8)2
Avg EPS beat(8)-2.81%
EPS beat(12)4
Avg EPS beat(12)-1.5%
EPS beat(16)6
Avg EPS beat(16)-0.73%
Revenue beat(2)1
Avg Revenue beat(2)7.14%
Min Revenue beat(2)-3.06%
Max Revenue beat(2)17.35%
Revenue beat(4)1
Avg Revenue beat(4)0.35%
Min Revenue beat(4)-7.65%
Max Revenue beat(4)17.35%
Revenue beat(8)3
Avg Revenue beat(8)1.65%
Revenue beat(12)4
Avg Revenue beat(12)1.39%
Revenue beat(16)7
Avg Revenue beat(16)1.41%
PT rev (1m)-1.1%
PT rev (3m)0.55%
EPS NQ rev (1m)0.15%
EPS NQ rev (3m)0.09%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)-0.99%
Revenue NQ rev (1m)0.15%
Revenue NQ rev (3m)0.67%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.81 | ||
| Fwd PE | 10.06 | ||
| P/S | 4.7 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.99 | ||
| P/tB | 0.99 | ||
| EV/EBITDA | N/A |
EPS(TTM)2.05
EY10.19%
EPS(NY)2
Fwd EY9.94%
FCF(TTM)-2.21
FCFYN/A
OCF(TTM)-2.21
OCFYN/A
SpS4.28
BVpS20.3
TBVpS20.3
PEG (NY)N/A
PEG (5Y)2.42
Graham Number30.6
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.42% | ||
| ROE | 9.52% | ||
| ROCE | 4.8% | ||
| ROIC | 3.79% | ||
| ROICexc | 3.93% | ||
| ROICexgc | 3.96% | ||
| OM | 47.81% | ||
| PM (TTM) | 45.16% | ||
| GM | 49.47% | ||
| 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%
ROICexgc growth 3Y12.39%
ROICexgc 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 | 1.09 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 2 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.23 | ||
| Quick Ratio | 2.23 | ||
| Altman-Z | 0.85 |
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)-14.94%
EPS 3Y5.05%
EPS 5Y4.06%
EPS Q2Q%-13.79%
EPS Next Y-12.04%
EPS Next 2Y-7.38%
EPS Next 3Y-5.46%
EPS Next 5YN/A
Revenue 1Y (TTM)2.72%
Revenue growth 3Y18%
Revenue growth 5Y14.37%
Sales Q2Q%18.71%
Revenue Next Year0.75%
Revenue Next 2Y2.9%
Revenue Next 3Y3.59%
Revenue Next 5YN/A
EBIT growth 1Y-1.03%
EBIT growth 3Y24.22%
EBIT growth 5Y12.28%
EBIT Next Year-98.78%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-405.49%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-405.49%
OCF growth 3YN/A
OCF growth 5YN/A
ARES CAPITAL CORP / ARCC FAQ
What is the fundamental rating for ARCC stock?
ChartMill assigns a fundamental rating of 4 / 10 to ARCC.
What is the valuation status of ARES CAPITAL CORP (ARCC) stock?
ChartMill assigns a valuation rating of 4 / 10 to ARES CAPITAL CORP (ARCC). This can be considered as Fairly Valued.
Can you provide the profitability details for ARES CAPITAL CORP?
ARES CAPITAL CORP (ARCC) has a profitability rating of 4 / 10.
Can you provide the PE and PB ratios for ARCC stock?
The Price/Earnings (PE) ratio for ARES CAPITAL CORP (ARCC) is 9.81 and the Price/Book (PB) ratio is 0.99.
What is the expected EPS growth for ARES CAPITAL CORP (ARCC) stock?
The Earnings per Share (EPS) of ARES CAPITAL CORP (ARCC) is expected to decline by -12.04% in the next year.