ARES MANAGEMENT CORP - A (ARES) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARES - US03990B1017 - Common Stock
169.05 USD
+0.32 (+0.19%)
169.05 USD
0 (0%)
Taking everything into account, ARES scores 4 out of 10 in our fundamental rating. ARES was compared to 235 industry peers in the Capital Markets industry. There are concerns on the financial health of ARES while its profitability can be described as average. ARES is valued quite expensively, but it does show have an excellent growth rating.
1. Profitability
1.1 Basic Checks
ARES had positive earnings in the past year.
In the past year ARES had a positive cash flow from operations.
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
ARES has a Return On Assets (1.89%) which is in line with its industry peers.
ARES has a better Return On Equity (11.44%) than 67.66% of its industry peers.
The Return On Invested Capital of ARES (4.41%) is better than 62.98% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ARES is below the industry average of 7.07%.
The 3 year average ROIC (3.87%) for ARES is below the current ROIC(4.41%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.89% | ||
| ROE | 11.44% | ||
| ROIC | 4.41% |
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
ARES has a Profit Margin of 9.56%. This is in the lower half of the industry: ARES underperforms 62.13% of its industry peers.
In the last couple of years the Profit Margin of ARES has grown nicely.
ARES has a Operating Margin (19.56%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of ARES has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.56% | ||
| PM (TTM) | 9.56% | ||
| 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
The number of shares outstanding for ARES has been increased compared to 5 years ago.
Compared to 1 year ago, ARES has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.52, we must say that ARES is in the distress zone and has some risk of bankruptcy.
ARES's Altman-Z score of 1.52 is fine compared to the rest of the industry. ARES outperforms 64.26% of its industry peers.
ARES has a debt to FCF ratio of 2.68. This is a good value and a sign of high solvency as ARES would need 2.68 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.68, ARES is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
A Debt/Equity ratio of 2.69 is on the high side and indicates that ARES has dependencies on debt financing.
The Debt to Equity ratio of ARES (2.69) is worse than 82.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.69 | ||
| Debt/FCF | 2.68 | ||
| Altman-Z | 1.52 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 0.26 indicates that ARES may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.26, ARES is doing worse than 85.11% of the companies in the same industry.
ARES has a Quick Ratio of 0.26. This is a bad value and indicates that ARES is not financially healthy enough and could expect problems in meeting its short term obligations.
ARES has a worse Quick ratio (0.26) than 85.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.26 | ||
| Quick Ratio | 0.26 |
3. Growth
3.1 Past
ARES shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.94%, which is quite good.
ARES shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.77% yearly.
Looking at the last year, ARES shows a very strong growth in Revenue. The Revenue has grown by 45.54%.
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)14.94%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%25.26%
Revenue 1Y (TTM)45.54%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%0.64%
3.2 Future
ARES is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.70% yearly.
The Revenue is expected to grow by 20.07% on average over the next years. This is a very strong growth
EPS Next Y29.59%
EPS Next 2Y29.36%
EPS Next 3Y26.11%
EPS Next 5Y21.7%
Revenue Next Year28.93%
Revenue Next 2Y24.74%
Revenue Next 3Y23.05%
Revenue Next 5Y20.07%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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
A Price/Earnings ratio of 37.24 indicates a quite expensive valuation of ARES.
Based on the Price/Earnings ratio, ARES is valued a bit more expensive than the industry average as 74.89% of the companies are valued more cheaply.
ARES's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 26.84.
With a Price/Forward Earnings ratio of 25.45, ARES can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, ARES is valued a bit more expensive than 63.40% of the companies in the same industry.
ARES's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.24 | ||
| Fwd PE | 25.45 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARES is valued a bit cheaper than 61.70% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ARES is valued a bit cheaper than 71.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.3 | ||
| EV/EBITDA | 54.48 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as ARES's earnings are expected to grow with 26.11% in the coming years.
PEG (NY)1.26
PEG (5Y)1.98
EPS Next 2Y29.36%
EPS Next 3Y26.11%
5. Dividend
5.1 Amount
ARES has a Yearly Dividend Yield of 2.65%.
Compared to an average industry Dividend Yield of 6.65, ARES has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.00, ARES pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.65% |
5.2 History
The dividend of ARES has a limited annual growth rate of 5.80%.
ARES has been paying a dividend for at least 10 years, so it has 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
ARES pays out 320.11% of its income as dividend. This is not a sustainable payout ratio.
ARES's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP320.11%
EPS Next 2Y29.36%
EPS Next 3Y26.11%
169.05
+0.32 (+0.19%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners84.05%
Inst Owner Change3.47%
Ins Owners2.95%
Ins Owner Change-0.85%
Market Cap55.26B
Revenue(TTM)5.36B
Net Income(TTM)511.84M
Analysts78.33
Price Target193.12 (14.24%)
Short Float %3.2%
Short Ratio1.92
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.65% |
Yearly Dividend4.22
Dividend Growth(5Y)5.8%
DP320.11%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-3.03%
Min EPS beat(2)-6.98%
Max EPS beat(2)0.92%
EPS beat(4)2
Avg EPS beat(4)-0.05%
Min EPS beat(4)-7.09%
Max EPS beat(4)12.95%
EPS beat(8)3
Avg EPS beat(8)-1.14%
EPS beat(12)5
Avg EPS beat(12)-1.24%
EPS beat(16)7
Avg EPS beat(16)0.06%
Revenue beat(2)2
Avg Revenue beat(2)3.27%
Min Revenue beat(2)0.08%
Max Revenue beat(2)6.46%
Revenue beat(4)3
Avg Revenue beat(4)2.16%
Min Revenue beat(4)-4.32%
Max Revenue beat(4)6.46%
Revenue beat(8)5
Avg Revenue beat(8)6.42%
Revenue beat(12)7
Avg Revenue beat(12)8.82%
Revenue beat(16)10
Avg Revenue beat(16)14.79%
PT rev (1m)1.72%
PT rev (3m)-3.17%
EPS NQ rev (1m)0.53%
EPS NQ rev (3m)-0.64%
EPS NY rev (1m)0.64%
EPS NY rev (3m)0.81%
Revenue NQ rev (1m)1.05%
Revenue NQ rev (3m)0.45%
Revenue NY rev (1m)1.56%
Revenue NY rev (3m)0.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.24 | ||
| Fwd PE | 25.45 | ||
| P/S | 10.32 | ||
| P/FCF | 12.3 | ||
| P/OCF | 12.12 | ||
| P/B | 12.35 | ||
| P/tB | N/A | ||
| EV/EBITDA | 54.48 |
EPS(TTM)4.54
EY2.69%
EPS(NY)6.64
Fwd EY3.93%
FCF(TTM)13.74
FCFY8.13%
OCF(TTM)13.95
OCFY8.25%
SpS16.38
BVpS13.69
TBVpS-3.46
PEG (NY)1.26
PEG (5Y)1.98
Graham Number37.39
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.89% | ||
| ROE | 11.44% | ||
| ROCE | 5.06% | ||
| ROIC | 4.41% | ||
| ROICexc | 4.75% | ||
| ROICexgc | 7.2% | ||
| OM | 19.56% | ||
| PM (TTM) | 9.56% | ||
| GM | N/A | ||
| FCFM | 83.89% |
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%
ROICexgc growth 3Y1.38%
ROICexgc 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-Score6
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.69 | ||
| Debt/FCF | 2.68 | ||
| Debt/EBITDA | 9.99 | ||
| Cap/Depr | 41.43% | ||
| Cap/Sales | 1.23% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 377.94% | ||
| Profit Quality | 877.73% | ||
| Current Ratio | 0.26 | ||
| Quick Ratio | 0.26 | ||
| Altman-Z | 1.52 |
F-Score6
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)14.94%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%25.26%
EPS Next Y29.59%
EPS Next 2Y29.36%
EPS Next 3Y26.11%
EPS Next 5Y21.7%
Revenue 1Y (TTM)45.54%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%0.64%
Revenue Next Year28.93%
Revenue Next 2Y24.74%
Revenue Next 3Y23.05%
Revenue Next 5Y20.07%
EBIT growth 1Y6.65%
EBIT growth 3Y4.56%
EBIT growth 5Y26.83%
EBIT Next Year37.85%
EBIT Next 3Y40.67%
EBIT Next 5Y17.23%
FCF growth 1Y5204.16%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y3244.68%
OCF growth 3YN/A
OCF growth 5YN/A
ARES MANAGEMENT CORP - A / ARES FAQ
What is the fundamental rating for ARES stock?
ChartMill assigns a fundamental rating of 4 / 10 to ARES.
What is the valuation status of ARES MANAGEMENT CORP - A (ARES) stock?
ChartMill assigns a valuation rating of 3 / 10 to ARES MANAGEMENT CORP - A (ARES). This can be considered as Overvalued.
How profitable is ARES MANAGEMENT CORP - A (ARES) stock?
ARES MANAGEMENT CORP - A (ARES) has a profitability rating of 4 / 10.
What are the PE and PB ratios of ARES MANAGEMENT CORP - A (ARES) stock?
The Price/Earnings (PE) ratio for ARES MANAGEMENT CORP - A (ARES) is 37.24 and the Price/Book (PB) ratio is 12.35.
What is the earnings growth outlook for ARES MANAGEMENT CORP - A?
The Earnings per Share (EPS) of ARES MANAGEMENT CORP - A (ARES) is expected to grow by 29.59% in the next year.