ARES CAPITAL CORP (ARCC)
US04010L1035 - Common Stock
Overall ARCC gets a fundamental rating of 4 out of 10. We evaluated ARCC against 220 industry peers in the Capital Markets industry. While ARCC is still in line with the averages on profitability rating, there are concerns on its financial health. ARCC has a decent growth rate and is not valued too expensively.
1. Profitability
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.
In the past 5 years ARCC reported 4 times negative operating cash flow.
1.2 Ratios
ARCC has a better Return On Assets (5.82%) than 74.65% of its industry peers.
The Return On Equity of ARCC (12.35%) is better than 68.66% of its industry peers.
The Return On Invested Capital of ARCC (4.38%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for ARCC is below the industry average of 6.99%.
The 3 year average ROIC (3.86%) for ARCC is below the current ROIC(4.38%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.82% | ||
| ROE | 12.35% | ||
| ROIC | 4.38% |
ROA(3y)5.53%
ROA(5y)4.98%
ROE(3y)12.51%
ROE(5y)10.98%
ROIC(3y)3.86%
ROIC(5y)4.04%
1.3 Margins
ARCC has a Profit Margin of 53.71%. This is amongst the best in the industry. ARCC outperforms 91.71% of its industry peers.
ARCC's Profit Margin has declined in the last couple of years.
The Operating Margin of ARCC (49.63%) is better than 86.64% of its industry peers.
In the last couple of years the Operating Margin of ARCC has declined.
With a Gross Margin value of 51.06%, ARCC perfoms like the industry average, outperforming 50.23% of the companies in the same industry.
ARCC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 49.63% | ||
| PM (TTM) | 53.71% | ||
| GM | 51.06% |
OM growth 3Y-2.94%
OM growth 5Y-1.6%
PM growth 3Y22.04%
PM growth 5Y-1.93%
GM growth 3Y-3.38%
GM growth 5Y-1.02%
2. Health
2.1 Basic Checks
Compared to 1 year ago, ARCC has more shares outstanding
ARCC has more shares outstanding than it did 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 0.92. This is a bad value and indicates that ARCC is not financially healthy and even has some risk of bankruptcy.
ARCC's Altman-Z score of 0.92 is in line compared to the rest of the industry. ARCC outperforms 51.61% of its industry peers.
A Debt/Equity ratio of 1.06 is on the high side and indicates that ARCC has dependencies on debt financing.
ARCC has a Debt to Equity ratio (1.06) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.06 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.92 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
ARCC has a Current Ratio of 1.09. This is a normal value and indicates that ARCC is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of ARCC (1.09) is comparable to the rest of the industry.
ARCC has a Quick Ratio of 1.09. This is a normal value and indicates that ARCC is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.09, ARCC perfoms like the industry average, outperforming 49.77% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.69% over the past year.
Measured over the past 5 years, ARCC shows a small growth in Earnings Per Share. The EPS has been growing by 7.12% on average per year.
The Revenue has grown by 15.35% in the past year. This is quite good.
The Revenue has been growing by 14.35% on average over the past years. This is quite good.
EPS 1Y (TTM)1.69%
EPS 3Y11.06%
EPS 5Y7.12%
EPS Q2Q%-1.69%
Revenue 1Y (TTM)15.35%
Revenue growth 3Y20.05%
Revenue growth 5Y14.35%
Sales Q2Q%18.32%
3.2 Future
Based on estimates for the next years, ARCC will show a decrease in Earnings Per Share. The EPS will decrease by -2.36% on average per year.
Based on estimates for the next years, ARCC will show a small growth in Revenue. The Revenue will grow by 5.34% on average per year.
EPS Next Y1.68%
EPS Next 2Y-2.5%
EPS Next 3Y-2.36%
EPS Next 5YN/A
Revenue Next Year16.69%
Revenue Next 2Y9.99%
Revenue Next 3Y5.34%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 9.02, which indicates a very decent valuation of ARCC.
Based on the Price/Earnings ratio, ARCC is valued a bit cheaper than the industry average as 73.73% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.54, ARCC is valued rather cheaply.
A Price/Forward Earnings ratio of 9.65 indicates a reasonable valuation of ARCC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ARCC indicates a somewhat cheap valuation: ARCC is cheaper than 70.97% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of ARCC to the average of the S&P500 Index (23.99), we can say ARCC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.02 | ||
| Fwd PE | 9.65 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ARCC does not grow enough to justify the current Price/Earnings ratio.
ARCC's earnings are expected to decrease with -2.36% in the coming years. This may justify a cheaper valuation.
PEG (NY)5.38
PEG (5Y)1.27
EPS Next 2Y-2.5%
EPS Next 3Y-2.36%
5. Dividend
5.1 Amount
ARCC has a Yearly Dividend Yield of 9.09%, which is a nice return.
ARCC's Dividend Yield is a higher than the industry average which is at 9.57.
Compared to an average S&P500 Dividend Yield of 2.36, ARCC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.09% |
5.2 History
The dividend of ARCC has a limited annual growth rate of 3.99%.
ARCC has paid a dividend for at least 10 years, which is a reliable track record.
ARCC has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)3.99%
Div Incr Years3
Div Non Decr Years4
5.3 Sustainability
69.65% 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.
DP69.65%
EPS Next 2Y-2.5%
EPS Next 3Y-2.36%
ARES CAPITAL CORP
NASDAQ:ARCC (12/24/2024, 7:55:53 PM)
Premarket: 21.74 -0.01 (-0.05%)21.75
+0.22 (+1.02%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners29.57%
Inst Owner Change1.95%
Ins Owners0.53%
Ins Owner Change0%
Market Cap14.05B
Analysts83
Price Target22.91 (5.33%)
Short Float %2.7%
Short Ratio4.81
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.09% |
Dividend Growth(5Y)3.99%
DP69.65%
Div Incr Years3
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.79%
Min EPS beat(2)-4.43%
Max EPS beat(2)2.86%
EPS beat(4)2
Avg EPS beat(4)-0.35%
Min EPS beat(4)-4.43%
Max EPS beat(4)3.13%
EPS beat(8)4
Avg EPS beat(8)0.38%
EPS beat(12)6
Avg EPS beat(12)0.79%
EPS beat(16)9
Avg EPS beat(16)4.1%
Revenue beat(2)1
Avg Revenue beat(2)0.81%
Min Revenue beat(2)-1.87%
Max Revenue beat(2)3.48%
Revenue beat(4)2
Avg Revenue beat(4)2.95%
Min Revenue beat(4)-1.87%
Max Revenue beat(4)12.03%
Revenue beat(8)3
Avg Revenue beat(8)1.91%
Revenue beat(12)6
Avg Revenue beat(12)1.77%
Revenue beat(16)9
Avg Revenue beat(16)3.65%
PT rev (1m)1.58%
PT rev (3m)1.58%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.74%
EPS NY rev (1m)-0.18%
EPS NY rev (3m)-1.43%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)11.17%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)0.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.02 | ||
| Fwd PE | 9.65 | ||
| P/S | 4.78 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.1 | ||
| P/tB | 1.1 | ||
| EV/EBITDA | N/A |
EPS(TTM)2.41
EY11.08%
EPS(NY)2.25
Fwd EY10.36%
FCF(TTM)-3.43
FCFYN/A
OCF(TTM)-3.43
OCFYN/A
SpS4.55
BVpS19.77
TBVpS19.77
PEG (NY)5.38
PEG (5Y)1.27
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.82% | ||
| ROE | 12.35% | ||
| ROCE | 5.54% | ||
| ROIC | 4.38% | ||
| ROICexc | 4.46% | ||
| ROICexgc | 4.49% | ||
| OM | 49.63% | ||
| PM (TTM) | 53.71% | ||
| GM | 51.06% | ||
| FCFM | N/A |
ROA(3y)5.53%
ROA(5y)4.98%
ROE(3y)12.51%
ROE(5y)10.98%
ROIC(3y)3.86%
ROIC(5y)4.04%
ROICexc(3y)3.94%
ROICexc(5y)4.11%
ROICexgc(3y)3.95%
ROICexgc(5y)4.13%
ROCE(3y)4.89%
ROCE(5y)5.12%
ROICexcg growth 3Y2.51%
ROICexcg growth 5Y-0.54%
ROICexc growth 3Y2.58%
ROICexc growth 5Y-0.49%
OM growth 3Y-2.94%
OM growth 5Y-1.6%
PM growth 3Y22.04%
PM growth 5Y-1.93%
GM growth 3Y-3.38%
GM growth 5Y-1.02%
F-Score3
Asset Turnover0.11
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.06 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 2.31 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z | 0.92 |
F-Score3
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)1.69%
EPS 3Y11.06%
EPS 5Y7.12%
EPS Q2Q%-1.69%
EPS Next Y1.68%
EPS Next 2Y-2.5%
EPS Next 3Y-2.36%
EPS Next 5YN/A
Revenue 1Y (TTM)15.35%
Revenue growth 3Y20.05%
Revenue growth 5Y14.35%
Sales Q2Q%18.32%
Revenue Next Year16.69%
Revenue Next 2Y9.99%
Revenue Next 3Y5.34%
Revenue Next 5YN/A
EBIT growth 1Y12.24%
EBIT growth 3Y16.52%
EBIT growth 5Y12.52%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y19.78%
FCF growth 3YN/A
FCF growth 5Y10.95%
OCF growth 1Y19.78%
OCF growth 3YN/A
OCF growth 5Y10.95%