ARES MANAGEMENT CORP - A (ARES) Stock Fundamental Analysis
NYSE:ARES - US03990B1017 - Common Stock
181.07 USD
+2.81 (+1.58%)
181.07 USD
0 (0%)
ARES gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 238 industry peers in the Capital Markets industry. ARES may be in some trouble as it scores bad on both profitability and health. ARES shows excellent growth, but is valued quite expensive already.
1. Profitability
1.1 Basic Checks
ARES had positive earnings in the past year.
ARES had a positive operating cash flow in the past year.
Each year in the past 5 years ARES has been profitable.
In the past 5 years ARES reported 4 times negative operating cash flow.
1.2 Ratios
With a Return On Assets value of 1.36%, ARES is not doing good in the industry: 61.76% of the companies in the same industry are doing better.
With a Return On Equity value of 8.47%, ARES perfoms like the industry average, outperforming 48.74% of the companies in the same industry.
With a Return On Invested Capital value of 3.79%, ARES perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ARES is below the industry average of 7.58%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.36% | ||
| ROE | 8.47% | ||
| ROIC | 3.79% |
ROA(3y)1.39%
ROA(5y)1.33%
ROE(3y)15.05%
ROE(5y)15.08%
ROIC(3y)3.87%
ROIC(5y)3.61%
1.3 Margins
Looking at the Profit Margin, with a value of 7.65%, ARES is doing worse than 62.60% of the companies in the same industry.
ARES's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 19.52%, ARES is in line with its industry, outperforming 41.18% of the companies in the same industry.
ARES's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.52% | ||
| PM (TTM) | 7.65% | ||
| GM | N/A |
OM growth 3Y7.41%
OM growth 5Y8.32%
PM growth 3Y6.46%
PM growth 5Y9.3%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
Compared to 1 year ago, ARES has more shares outstanding
Compared to 5 years ago, ARES has more shares outstanding
Compared to 1 year ago, ARES has an improved debt to assets ratio.
2.2 Solvency
ARES has an Altman-Z score of 1.61. This is a bad value and indicates that ARES is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of ARES (1.61) is better than 65.97% of its industry peers.
The Debt to FCF ratio of ARES is 3.21, which is a good value as it means it would take ARES, 3.21 years of fcf income to pay off all of its debts.
ARES's Debt to FCF ratio of 3.21 is fine compared to the rest of the industry. ARES outperforms 78.15% of its industry peers.
ARES has a Debt/Equity ratio of 2.93. This is a high value indicating a heavy dependency on external financing.
ARES has a worse Debt to Equity ratio (2.93) than 81.51% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.93 | ||
| Debt/FCF | 3.21 | ||
| Altman-Z | 1.61 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 0.31 indicates that ARES may have some problems paying its short term obligations.
ARES's Current ratio of 0.31 is on the low side compared to the rest of the industry. ARES is outperformed by 82.77% of its industry peers.
ARES has a Quick Ratio of 0.31. This is a bad value and indicates that ARES is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.31, ARES is doing worse than 82.77% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.31 | ||
| Quick Ratio | 0.31 |
3. Growth
3.1 Past
ARES shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.27%, which is quite good.
The Earnings Per Share has been growing by 18.77% on average over the past years. This is quite good.
ARES shows a strong growth in Revenue. In the last year, the Revenue has grown by 49.87%.
Measured over the past years, ARES shows a quite strong growth in Revenue. The Revenue has been growing by 17.09% on average per year.
EPS 1Y (TTM)12.27%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%4.04%
Revenue 1Y (TTM)49.87%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%71.19%
3.2 Future
Based on estimates for the next years, ARES will show a very strong growth in Earnings Per Share. The EPS will grow by 23.49% on average per year.
The Revenue is expected to grow by 15.33% on average over the next years. This is quite good.
EPS Next Y28.56%
EPS Next 2Y28.03%
EPS Next 3Y25.72%
EPS Next 5Y23.49%
Revenue Next Year27.36%
Revenue Next 2Y22.73%
Revenue Next 3Y22.41%
Revenue Next 5Y15.33%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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 stable.
4. Valuation
4.1 Price/Earnings Ratio
ARES is valuated quite expensively with a Price/Earnings ratio of 42.11.
Based on the Price/Earnings ratio, ARES is valued a bit more expensive than the industry average as 76.47% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Earnings ratio of 27.24, ARES is valued quite expensively.
Based on the Price/Forward Earnings ratio of 27.82, the valuation of ARES can be described as expensive.
ARES's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. ARES is more expensive than 69.33% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.81. ARES is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.11 | ||
| Fwd PE | 27.82 |
4.2 Price Multiples
61.76% of the companies in the same industry are more expensive than ARES, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARES indicates a somewhat cheap valuation: ARES is cheaper than 65.97% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.87 | ||
| EV/EBITDA | 63.94 |
4.3 Compensation for Growth
ARES's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ARES's earnings are expected to grow with 25.72% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.47
PEG (5Y)2.24
EPS Next 2Y28.03%
EPS Next 3Y25.72%
5. Dividend
5.1 Amount
ARES has a Yearly Dividend Yield of 2.51%. Purely for dividend investing, there may be better candidates out there.
ARES's Dividend Yield is comparable with the industry average which is at 8.00.
ARES's Dividend Yield is comparable with the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.51% |
5.2 History
The dividend of ARES has a limited annual growth rate of 5.80%.
ARES has paid a dividend for at least 10 years, which is a reliable track record.
As ARES did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)5.8%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
419.97% of the earnings are spent on dividend by ARES. This is not a sustainable payout ratio.
ARES's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP419.97%
EPS Next 2Y28.03%
EPS Next 3Y25.72%
181.07
+2.81 (+1.58%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners80.48%
Inst Owner Change0.69%
Ins Owners3%
Ins Owner Change-1.9%
Market Cap59.16B
Analysts77.39
Price Target197.37 (9%)
Short Float %4.14%
Short Ratio5.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.51% |
Yearly Dividend4.22
Dividend Growth(5Y)5.8%
DP419.97%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.99%
Min EPS beat(2)-6.98%
Max EPS beat(2)12.95%
EPS beat(4)1
Avg EPS beat(4)-0.6%
Min EPS beat(4)-7.09%
Max EPS beat(4)12.95%
EPS beat(8)2
Avg EPS beat(8)-2.01%
EPS beat(12)4
Avg EPS beat(12)-1.34%
EPS beat(16)6
Avg EPS beat(16)-0.16%
Revenue beat(2)1
Avg Revenue beat(2)15.88%
Min Revenue beat(2)-4.32%
Max Revenue beat(2)36.08%
Revenue beat(4)3
Avg Revenue beat(4)19.07%
Min Revenue beat(4)-4.32%
Max Revenue beat(4)38.08%
Revenue beat(8)4
Avg Revenue beat(8)9.71%
Revenue beat(12)7
Avg Revenue beat(12)13.25%
Revenue beat(16)10
Avg Revenue beat(16)21.39%
PT rev (1m)4.26%
PT rev (3m)12.94%
EPS NQ rev (1m)-0.7%
EPS NQ rev (3m)-6.56%
EPS NY rev (1m)-2.27%
EPS NY rev (3m)-2.54%
Revenue NQ rev (1m)-0.38%
Revenue NQ rev (3m)-8.45%
Revenue NY rev (1m)2.59%
Revenue NY rev (3m)2.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.11 | ||
| Fwd PE | 27.82 | ||
| P/S | 12.25 | ||
| P/FCF | 14.87 | ||
| P/OCF | 14.57 | ||
| P/B | 13.56 | ||
| P/tB | N/A | ||
| EV/EBITDA | 63.94 |
EPS(TTM)4.3
EY2.37%
EPS(NY)6.51
Fwd EY3.59%
FCF(TTM)12.18
FCFY6.72%
OCF(TTM)12.42
OCFY6.86%
SpS14.78
BVpS13.35
TBVpS-3.96
PEG (NY)1.47
PEG (5Y)2.24
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.36% | ||
| ROE | 8.47% | ||
| ROCE | 4.36% | ||
| ROIC | 3.79% | ||
| ROICexc | 4.08% | ||
| ROICexgc | 6.09% | ||
| OM | 19.52% | ||
| PM (TTM) | 7.65% | ||
| GM | N/A | ||
| FCFM | 82.39% |
ROA(3y)1.39%
ROA(5y)1.33%
ROE(3y)15.05%
ROE(5y)15.08%
ROIC(3y)3.87%
ROIC(5y)3.61%
ROICexc(3y)4.28%
ROICexc(5y)3.97%
ROICexgc(3y)4.93%
ROICexgc(5y)4.55%
ROCE(3y)4.44%
ROCE(5y)4.15%
ROICexcg growth 3Y1.38%
ROICexcg growth 5Y15.46%
ROICexc growth 3Y1.72%
ROICexc growth 5Y12.7%
OM growth 3Y7.41%
OM growth 5Y8.32%
PM growth 3Y6.46%
PM growth 5Y9.3%
GM growth 3YN/A
GM growth 5YN/A
F-Score5
Asset Turnover0.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.93 | ||
| Debt/FCF | 3.21 | ||
| Debt/EBITDA | 11.61 | ||
| Cap/Depr | 51.14% | ||
| Cap/Sales | 1.68% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 368.62% | ||
| Profit Quality | 1076.46% | ||
| Current Ratio | 0.31 | ||
| Quick Ratio | 0.31 | ||
| Altman-Z | 1.61 |
F-Score5
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)32.4%
Cap/Depr(5y)31.97%
Cap/Sales(3y)1.79%
Cap/Sales(5y)1.39%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)12.27%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%4.04%
EPS Next Y28.56%
EPS Next 2Y28.03%
EPS Next 3Y25.72%
EPS Next 5Y23.49%
Revenue 1Y (TTM)49.87%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%71.19%
Revenue Next Year27.36%
Revenue Next 2Y22.73%
Revenue Next 3Y22.41%
Revenue Next 5Y15.33%
EBIT growth 1Y8.39%
EBIT growth 3Y4.56%
EBIT growth 5Y26.83%
EBIT Next Year54.93%
EBIT Next 3Y34.39%
EBIT Next 5YN/A
FCF growth 1Y2130.82%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y2678.78%
OCF growth 3YN/A
OCF growth 5YN/A