ARES CAPITAL CORP (ARCC) Fundamental Analysis & Valuation

NASDAQ:ARCC • US04010L1035

Current stock price

18.09 USD
+0.08 (+0.44%)
At close:
18.09 USD
0 (0%)
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This ARCC fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

4

1. ARCC Profitability Analysis

1.1 Basic Checks

  • In the past year ARCC was profitable.
  • In the past year ARCC has reported a negative cash flow from operations.
  • Each year in the past 5 years ARCC has been profitable.
  • ARCC had negative operating cash flow in 4 of the past 5 years.
ARCC Yearly Net Income VS EBIT VS OCF VS FCFARCC Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 1B -1B -2B

1.2 Ratios

  • ARCC has a better Return On Assets (4.16%) than 64.85% of its industry peers.
  • With a Return On Equity value of 9.07%, ARCC perfoms like the industry average, outperforming 56.49% of the companies in the same industry.
  • ARCC has a Return On Invested Capital (3.78%) which is in line with its industry peers.
  • The Average Return On Invested Capital over the past 3 years for ARCC is below the industry average of 7.23%.
Industry RankSector Rank
ROA 4.16%
ROE 9.07%
ROIC 3.78%
ROA(3y)5.31%
ROA(5y)5.23%
ROE(3y)11.35%
ROE(5y)11.6%
ROIC(3y)4.16%
ROIC(5y)3.93%
ARCC Yearly ROA, ROE, ROICARCC Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5 10 15

1.3 Margins

  • Looking at the Profit Margin, with a value of 42.56%, ARCC belongs to the top of the industry, outperforming 87.45% of the companies in the same industry.
  • ARCC's Profit Margin has improved in the last couple of years.
  • With an excellent Operating Margin value of 47.77%, ARCC belongs to the best of the industry, outperforming 85.36% of the companies in the same industry.
  • ARCC's Operating Margin has declined in the last couple of years.
  • With a Gross Margin value of 49.44%, ARCC perfoms like the industry average, outperforming 57.32% of the companies in the same industry.
  • In the last couple of years the Gross Margin of ARCC has declined.
Industry RankSector Rank
OM 47.77%
PM (TTM) 42.56%
GM 49.44%
OM growth 3Y-4.43%
OM growth 5Y-2.35%
PM growth 3Y14.14%
PM growth 5Y5.85%
GM growth 3Y-4.37%
GM growth 5Y-2.57%
ARCC Yearly Profit, Operating, Gross MarginsARCC Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20 40 60 80

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2

2. ARCC Health Analysis

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 worse debt/assets ratio than last year.
ARCC Yearly Shares OutstandingARCC Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M
ARCC Yearly Total Debt VS Total AssetsARCC Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10B 20B 30B

2.2 Solvency

  • Based on the Altman-Z score of 0.77, we must say that ARCC is in the distress zone and has some risk of bankruptcy.
  • ARCC's Altman-Z score of 0.77 is in line compared to the rest of the industry. ARCC outperforms 51.46% of its industry peers.
  • A Debt/Equity ratio of 1.12 is on the high side and indicates that ARCC has dependencies on debt financing.
  • Looking at the Debt to Equity ratio, with a value of 1.12, ARCC is in line with its industry, outperforming 44.77% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 1.12
Debt/FCF N/A
Altman-Z 0.77
ROIC/WACCN/A
WACCN/A
ARCC Yearly LT Debt VS Equity VS FCFARCC Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 5B 10B 15B

2.3 Liquidity

  • A Current Ratio of 1.67 indicates that ARCC should not have too much problems paying its short term obligations.
  • ARCC has a Current ratio of 1.67. This is in the better half of the industry: ARCC outperforms 70.71% of its industry peers.
  • ARCC has a Quick Ratio of 1.67. This is a normal value and indicates that ARCC is financially healthy and should not expect problems in meeting its short term obligations.
  • Looking at the Quick ratio, with a value of 1.67, ARCC is in the better half of the industry, outperforming 70.71% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.67
Quick Ratio 1.67
ARCC Yearly Current Assets VS Current LiabilitesARCC Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M 800M 1B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

2

3. ARCC Growth Analysis

3.1 Past

  • ARCC shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -18.03%.
  • The Earnings Per Share has been growing slightly by 2.00% on average over the past years.
  • ARCC shows a small growth in Revenue. In the last year, the Revenue has grown by 2.07%.
  • ARCC shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 15.10% yearly.
EPS 1Y (TTM)-18.03%
EPS 3Y-1.69%
EPS 5Y2%
EPS Q2Q%-25.45%
Revenue 1Y (TTM)2.07%
Revenue growth 3Y13.34%
Revenue growth 5Y15.1%
Sales Q2Q%-5.8%

3.2 Future

  • ARCC is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -1.68% yearly.
  • Based on estimates for the next years, ARCC will show a decrease in Revenue. The Revenue will decrease by -3.21% on average per year.
EPS Next Y3.5%
EPS Next 2Y1.31%
EPS Next 3Y-1.68%
EPS Next 5YN/A
Revenue Next Year3.53%
Revenue Next 2Y2.91%
Revenue Next 3Y-3.21%
Revenue Next 5YN/A

3.3 Evolution

  • The EPS growth rate is decreasing: in the next years the growth will be less 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 decreasing.
ARCC Yearly Revenue VS EstimatesARCC Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 1B 2B 3B
ARCC Yearly EPS VS EstimatesARCC Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 0.5 1 1.5 2

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4

4. ARCC Valuation Analysis

4.1 Price/Earnings Ratio

  • ARCC is valuated reasonably with a Price/Earnings ratio of 9.47.
  • Compared to the rest of the industry, the Price/Earnings ratio of ARCC indicates a somewhat cheap valuation: ARCC is cheaper than 68.20% of the companies listed in the same industry.
  • ARCC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.78.
  • ARCC is valuated reasonably with a Price/Forward Earnings ratio of 9.15.
  • 72.80% of the companies in the same industry are more expensive than ARCC, based on the Price/Forward Earnings ratio.
  • ARCC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 23.54.
Industry RankSector Rank
PE 9.47
Fwd PE 9.15
ARCC Price Earnings VS Forward Price EarningsARCC Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

Industry RankSector Rank
P/FCF N/A
EV/EBITDA N/A
ARCC Per share dataARCC EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 10 15

4.3 Compensation for Growth

  • The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)2.71
PEG (5Y)4.74
EPS Next 2Y1.31%
EPS Next 3Y-1.68%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

6

5. ARCC Dividend Analysis

5.1 Amount

  • With a Yearly Dividend Yield of 11.00%, ARCC is a good candidate for dividend investing.
  • ARCC's Dividend Yield is a higher than the industry average which is at 6.89.
  • ARCC's Dividend Yield is rather good when compared to the S&P500 average which is at 1.89.
Industry RankSector Rank
Dividend Yield 11%

5.2 History

  • The dividend of ARCC has a limited annual growth rate of 2.72%.
  • ARCC has paid a dividend for at least 10 years, which is a reliable track record.
  • ARCC has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)2.72%
Div Incr Years0
Div Non Decr Years5
ARCC Yearly Dividends per shareARCC Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0.5 1 1.5

5.3 Sustainability

  • 97.31% 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.
DP97.31%
EPS Next 2Y1.31%
EPS Next 3Y-1.68%
ARCC Yearly Income VS Free CF VS DividendARCC Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 1B -1B -2B
ARCC Dividend Payout.ARCC Dividend Payout, showing the Payout Ratio.ARCC Dividend Payout.PayoutRetained Earnings

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ARCC Fundamentals: All Metrics, Ratios and Statistics

ARES CAPITAL CORP

NASDAQ:ARCC (4/10/2026, 8:00:01 PM)

After market: 18.09 0 (0%)

18.09

+0.08 (+0.44%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)02-04
Earnings (Next)04-28
Inst Owners34.47%
Inst Owner Change-0.01%
Ins Owners0.47%
Ins Owner Change1.47%
Market Cap12.99B
Revenue(TTM)3.05B
Net Income(TTM)1.30B
Analysts83
Price Target22.57 (24.77%)
Short Float %5.67%
Short Ratio4.93
Dividend
Industry RankSector Rank
Dividend Yield 11%
Yearly Dividend1.82
Dividend Growth(5Y)2.72%
DP97.31%
Div Incr Years0
Div Non Decr Years5
Ex-Date03-13
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-10.83%
Min EPS beat(2)-19.28%
Max EPS beat(2)-2.38%
EPS beat(4)0
Avg EPS beat(4)-8.42%
Min EPS beat(4)-19.28%
Max EPS beat(4)-2.38%
EPS beat(8)1
Avg EPS beat(8)-5.61%
EPS beat(12)3
Avg EPS beat(12)-3.92%
EPS beat(16)5
Avg EPS beat(16)-2.95%
Revenue beat(2)1
Avg Revenue beat(2)2.78%
Min Revenue beat(2)-11.79%
Max Revenue beat(2)17.35%
Revenue beat(4)1
Avg Revenue beat(4)-1.29%
Min Revenue beat(4)-11.79%
Max Revenue beat(4)17.35%
Revenue beat(8)2
Avg Revenue beat(8)-1.33%
Revenue beat(12)3
Avg Revenue beat(12)-0.35%
Revenue beat(16)6
Avg Revenue beat(16)-0.14%
PT rev (1m)-0.65%
PT rev (3m)-2.29%
EPS NQ rev (1m)-0.64%
EPS NQ rev (3m)-1.63%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.62%
Revenue NQ rev (1m)-0.09%
Revenue NQ rev (3m)-1.02%
Revenue NY rev (1m)-0.59%
Revenue NY rev (3m)-1.56%
Valuation
Industry RankSector Rank
PE 9.47
Fwd PE 9.15
P/S 4.26
P/FCF N/A
P/OCF N/A
P/B 0.91
P/tB 0.91
EV/EBITDA N/A
EPS(TTM)1.91
EY10.56%
EPS(NY)1.98
Fwd EY10.93%
FCF(TTM)-2.39
FCFYN/A
OCF(TTM)-2.39
OCFYN/A
SpS4.25
BVpS19.94
TBVpS19.94
PEG (NY)2.71
PEG (5Y)4.74
Graham Number29.27
Profitability
Industry RankSector Rank
ROA 4.16%
ROE 9.07%
ROCE 4.78%
ROIC 3.78%
ROICexc 3.86%
ROICexgc 3.89%
OM 47.77%
PM (TTM) 42.56%
GM 49.44%
FCFM N/A
ROA(3y)5.31%
ROA(5y)5.23%
ROE(3y)11.35%
ROE(5y)11.6%
ROIC(3y)4.16%
ROIC(5y)3.93%
ROICexc(3y)4.25%
ROICexc(5y)4.01%
ROICexgc(3y)4.28%
ROICexgc(5y)4.04%
ROCE(3y)5.26%
ROCE(5y)4.98%
ROICexgc growth 3Y-2.72%
ROICexgc growth 5Y-1.5%
ROICexc growth 3Y-2.84%
ROICexc growth 5Y-1.53%
OM growth 3Y-4.43%
OM growth 5Y-2.35%
PM growth 3Y14.14%
PM growth 5Y5.85%
GM growth 3Y-4.37%
GM growth 5Y-2.57%
F-Score2
Asset Turnover0.1
Health
Industry RankSector Rank
Debt/Equity 1.12
Debt/FCF N/A
Debt/EBITDA N/A
Cap/Depr N/A
Cap/Sales N/A
Interest Coverage 1.94
Cash Conversion N/A
Profit Quality N/A
Current Ratio 1.67
Quick Ratio 1.67
Altman-Z 0.77
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)-18.03%
EPS 3Y-1.69%
EPS 5Y2%
EPS Q2Q%-25.45%
EPS Next Y3.5%
EPS Next 2Y1.31%
EPS Next 3Y-1.68%
EPS Next 5YN/A
Revenue 1Y (TTM)2.07%
Revenue growth 3Y13.34%
Revenue growth 5Y15.1%
Sales Q2Q%-5.8%
Revenue Next Year3.53%
Revenue Next 2Y2.91%
Revenue Next 3Y-3.21%
Revenue Next 5YN/A
EBIT growth 1Y-1.22%
EBIT growth 3Y8.33%
EBIT growth 5Y12.39%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y19.31%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y19.31%
OCF growth 3YN/A
OCF growth 5YN/A

ARES CAPITAL CORP / ARCC Fundamental Analysis FAQ

What is the fundamental rating for ARCC stock?

ChartMill assigns a fundamental rating of 3 / 10 to ARCC.


What is the valuation status for ARCC stock?

ChartMill assigns a valuation rating of 4 / 10 to ARES CAPITAL CORP (ARCC). This can be considered as Fairly Valued.


What is the profitability of ARCC stock?

ARES CAPITAL CORP (ARCC) has a profitability rating of 4 / 10.


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 grow by 3.5% in the next year.


Can you provide the dividend sustainability for ARCC stock?

The dividend rating of ARES CAPITAL CORP (ARCC) is 6 / 10 and the dividend payout ratio is 97.31%.