ARES CAPITAL CORP (ARCC) Stock Fundamental Analysis
USA - NASDAQ:ARCC - US04010L1035 - Common Stock
20.61 USD
+0.04 (+0.19%)
20.6687 USD
+0.06 (+0.28%)
We assign a fundamental rating of 3 out of 10 to ARCC. ARCC was compared to 235 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.
In the past year ARCC has reported a negative cash flow from operations.
In the past 5 years ARCC has always been profitable.
ARCC had negative operating cash flow in 4 of the past 5 years.
1.2 Ratios
ARCC has a better Return On Assets (4.65%) than 65.96% of its industry peers.
Looking at the Return On Equity, with a value of 9.64%, ARCC is in line with its industry, outperforming 54.47% of the companies in the same industry.
ARCC has a Return On Invested Capital (4.09%) which is in line with its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ARCC is below the industry average of 7.61%.
| 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's Profit Margin of 44.94% is amongst the best of the industry. ARCC outperforms 87.66% 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 82.98% of its industry peers.
ARCC's Operating Margin has declined in the last couple of years.
ARCC has a Gross Margin of 50.28%. This is comparable to the rest of the industry: ARCC outperforms 60.00% of its industry peers.
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
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 0.89. This is a bad value and indicates that ARCC is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 0.89, ARCC perfoms like the industry average, outperforming 48.94% of the companies in the same industry.
ARCC has a Debt/Equity ratio of 1.01. This is a high value indicating a heavy dependency on external financing.
ARCC has a Debt to Equity ratio of 1.01. This is comparable to the rest of the industry: ARCC outperforms 49.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.01 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.89 |
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.
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 -14.94% in the last year.
ARCC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.06% yearly.
ARCC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.38%.
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)14.38%
Revenue growth 3Y18%
Revenue growth 5Y14.37%
Sales Q2Q%0.9%
3.2 Future
ARCC is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -5.63% yearly.
Based on estimates for the next years, ARCC will show a small growth in Revenue. The Revenue will grow by 1.58% on average per year.
EPS Next Y-11.94%
EPS Next 2Y-7.15%
EPS Next 3Y-5.63%
EPS Next 5YN/A
Revenue Next Year0.29%
Revenue Next 2Y2.63%
Revenue Next 3Y1.58%
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.
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
With a Price/Earnings ratio of 10.05, the valuation of ARCC can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of ARCC indicates a somewhat cheap valuation: ARCC is cheaper than 70.64% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.76. ARCC is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 10.26, the valuation of ARCC can be described as reasonable.
Based on the Price/Forward Earnings ratio, ARCC is valued a bit cheaper than 69.79% of the companies in the same industry.
ARCC is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.63, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.05 | ||
| Fwd PE | 10.26 |
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 -5.63% in the coming years.
PEG (NY)N/A
PEG (5Y)2.48
EPS Next 2Y-7.15%
EPS Next 3Y-5.63%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 9.45%, ARCC is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 8.34, ARCC pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.31, ARCC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.45% |
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
89.80% of the earnings are spent on dividend by ARCC. This is not a sustainable payout ratio.
The Dividend Rate of ARCC has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP89.8%
EPS Next 2Y-7.15%
EPS Next 3Y-5.63%
20.61
+0.04 (+0.19%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners32.38%
Inst Owner Change-16.44%
Ins Owners0.47%
Ins Owner Change0%
Market Cap14.54B
Revenue(TTM)2.99B
Net Income(TTM)1.35B
Analysts84
Price Target23.5 (14.02%)
Short Float %2.14%
Short Ratio2.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.45% |
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%
PT rev (3m)1.67%
EPS NQ rev (1m)0.12%
EPS NQ rev (3m)-0.97%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)-0.99%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.92%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.05 | ||
| Fwd PE | 10.26 | ||
| P/S | 4.83 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.04 | ||
| P/tB | 1.04 | ||
| EV/EBITDA | N/A |
EPS(TTM)2.05
EY9.95%
EPS(NY)2.01
Fwd EY9.75%
FCF(TTM)-1.85
FCFYN/A
OCF(TTM)-1.85
OCFYN/A
SpS4.27
BVpS19.9
TBVpS19.9
PEG (NY)N/A
PEG (5Y)2.48
Graham Number30.29
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%
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 | 1.01 | ||
| 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 | 0.89 |
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-11.94%
EPS Next 2Y-7.15%
EPS Next 3Y-5.63%
EPS Next 5YN/A
Revenue 1Y (TTM)14.38%
Revenue growth 3Y18%
Revenue growth 5Y14.37%
Sales Q2Q%0.9%
Revenue Next Year0.29%
Revenue Next 2Y2.63%
Revenue Next 3Y1.58%
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
ARES CAPITAL CORP / ARCC FAQ
What is the fundamental rating for ARCC stock?
ChartMill assigns a fundamental rating of 3 / 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 10.05 and the Price/Book (PB) ratio is 1.04.
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 -11.94% in the next year.