ARES MANAGEMENT CORP - A (ARES) Stock Fundamental Analysis
USA - NYSE:ARES - US03990B1017 - Common Stock
152.4 USD
+1.79 (+1.19%)
152.4 USD
0 (0%)
Overall ARES gets a fundamental rating of 4 out of 10. We evaluated ARES against 237 industry peers in the Capital Markets industry. ARES has a bad profitability rating. Also its financial health evaluation is rather negative. ARES is valued quite expensive, but it does show an excellent growth.
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.
In the past 5 years ARES has always been profitable.
ARES had negative operating cash flow in 4 of the past 5 years.
1.2 Ratios
ARES has a Return On Assets of 1.36%. This is in the lower half of the industry: ARES underperforms 63.29% of its industry peers.
ARES has a Return On Equity (8.47%) which is comparable to the rest of the industry.
ARES has a Return On Invested Capital (3.79%) which is in line with its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ARES is below the industry average of 7.59%.
| 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
ARES has a worse Profit Margin (7.65%) than 63.29% of its industry peers.
ARES's Profit Margin has improved in the last couple of years.
ARES's Operating Margin of 19.52% is in line compared to the rest of the industry. ARES outperforms 41.35% of its industry peers.
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
ARES has more shares outstanding than it did 1 year ago.
ARES has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ARES has an improved debt to assets ratio.
2.2 Solvency
ARES has an Altman-Z score of 1.35. This is a bad value and indicates that ARES is not financially healthy and even has some risk of bankruptcy.
ARES has a better Altman-Z score (1.35) than 62.45% 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.
Looking at the Debt to FCF ratio, with a value of 3.21, ARES is in the better half of the industry, outperforming 79.32% of the companies in the same industry.
A Debt/Equity ratio of 2.93 is on the high side and indicates that ARES has dependencies on debt financing.
With a Debt to Equity ratio value of 2.93, ARES is not doing good in the industry: 81.86% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.93 | ||
| Debt/FCF | 3.21 | ||
| Altman-Z | 1.35 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
ARES has a Current 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.
The Current ratio of ARES (0.31) is worse than 80.17% of its industry peers.
A Quick Ratio of 0.31 indicates that ARES may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.31, ARES is doing worse than 80.17% 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%.
The Revenue has been growing by 17.09% on average over the past years. This is quite good.
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
The Earnings Per Share is expected to grow by 23.49% on average over the next years. This is a very strong growth
ARES is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.33% yearly.
EPS Next Y28.56%
EPS Next 2Y28.03%
EPS Next 3Y25.72%
EPS Next 5Y23.49%
Revenue Next Year28.24%
Revenue Next 2Y23.21%
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
ARES is valuated quite expensively with a Price/Earnings ratio of 35.44.
Based on the Price/Earnings ratio, ARES is valued a bit more expensive than 74.26% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.86, ARES is valued a bit more expensive.
With a Price/Forward Earnings ratio of 23.42, ARES is valued on the expensive side.
63.29% of the companies in the same industry are cheaper than ARES, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.32. ARES is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.44 | ||
| Fwd PE | 23.42 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARES indicates a somewhat cheap valuation: ARES is cheaper than 62.03% of the companies listed in the same industry.
67.51% of the companies in the same industry are more expensive than ARES, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.52 | ||
| EV/EBITDA | 54.91 |
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 25.72% in the coming years.
PEG (NY)1.24
PEG (5Y)1.89
EPS Next 2Y28.03%
EPS Next 3Y25.72%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.97%, ARES has a reasonable but not impressive dividend return.
ARES's Dividend Yield is comparable with the industry average which is at 8.30.
ARES's Dividend Yield is a higher than the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.97% |
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
ARES pays out 419.97% of its income as dividend. This is not a sustainable payout ratio.
The dividend of ARES is growing, but earnings are growing more, so the dividend growth is sustainable.
DP419.97%
EPS Next 2Y28.03%
EPS Next 3Y25.72%
152.4
+1.79 (+1.19%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners88.15%
Inst Owner Change0.69%
Ins Owners2.97%
Ins Owner Change-0.45%
Market Cap49.79B
Analysts77.39
Price Target199.45 (30.87%)
Short Float %4.13%
Short Ratio5.57
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.97% |
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)1.05%
PT rev (3m)8.47%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.04%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.67%
Revenue NQ rev (1m)0.47%
Revenue NQ rev (3m)0.19%
Revenue NY rev (1m)0.69%
Revenue NY rev (3m)3.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.44 | ||
| Fwd PE | 23.42 | ||
| P/S | 10.31 | ||
| P/FCF | 12.52 | ||
| P/OCF | 12.27 | ||
| P/B | 11.42 | ||
| P/tB | N/A | ||
| EV/EBITDA | 54.91 |
EPS(TTM)4.3
EY2.82%
EPS(NY)6.51
Fwd EY4.27%
FCF(TTM)12.18
FCFY7.99%
OCF(TTM)12.42
OCFY8.15%
SpS14.78
BVpS13.35
TBVpS-3.96
PEG (NY)1.24
PEG (5Y)1.89
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 | 1.35 |
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 Year28.24%
Revenue Next 2Y23.21%
Revenue Next 3Y22.41%
Revenue Next 5Y15.33%
EBIT growth 1Y8.39%
EBIT growth 3Y4.56%
EBIT growth 5Y26.83%
EBIT Next Year44.29%
EBIT Next 3Y31.79%
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