ARES CAPITAL CORP (ARCC) Stock Fundamental Analysis
USA - NASDAQ:ARCC - US04010L1035 - Common Stock
19.975 USD
+0.07 (+0.33%)
Taking everything into account, ARCC scores 3 out of 10 in our fundamental rating. ARCC was compared to 236 industry peers in the Capital Markets industry. ARCC has a medium profitability rating, but doesn't score so well on its financial health evaluation. ARCC has a valuation in line with the averages, but on the other hand it scores bad on growth.
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 (4.65%) than 65.68% of its industry peers.
ARCC has a Return On Equity of 9.64%. This is comparable to the rest of the industry: ARCC outperforms 54.24% of its industry peers.
ARCC has a Return On Invested Capital (4.09%) which is comparable to the rest of the industry.
ARCC had an Average Return On Invested Capital over the past 3 years of 4.28%. This is below the industry average of 7.56%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.65% | ||
| ROE | 9.64% | ||
| ROIC | 4.09% |
ROA(3y)4.82%
ROA(5y)4.99%
ROE(3y)10.42%
ROE(5y)11.14%
ROIC(3y)4.28%
ROIC(5y)4%
1.3 Margins
ARCC's Profit Margin of 44.94% is amongst the best of the industry. ARCC outperforms 87.29% of its industry peers.
ARCC's Profit Margin has been stable in the last couple of years.
ARCC has a better Operating Margin (48.72%) than 82.63% of its industry peers.
ARCC's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 50.28%, ARCC is in the better half of the industry, outperforming 60.17% of the companies in the same industry.
In the last couple of years the Gross Margin of ARCC has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 48.72% | ||
| PM (TTM) | 44.94% | ||
| GM | 50.28% |
OM growth 3Y5.28%
OM growth 5Y-1.82%
PM growth 3Y-16.07%
PM growth 5Y-0.39%
GM growth 3Y4.55%
GM growth 5Y-1.61%
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 0.87. This is a bad value and indicates that ARCC is not financially healthy and even has some risk of bankruptcy.
ARCC has a Altman-Z score of 0.87. This is comparable to the rest of the industry: ARCC outperforms 49.15% of its industry peers.
ARCC has a Debt/Equity ratio of 1.01. This is a high value indicating a heavy dependency on external financing.
ARCC's Debt to Equity ratio of 1.01 is in line compared to the rest of the industry. ARCC outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.01 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.87 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
ARCC has a Current Ratio of 1.07. This is a normal value and indicates that ARCC is financially healthy and should not expect problems in meeting its short term obligations.
ARCC has a Current ratio of 1.07. This is comparable to the rest of the industry: ARCC outperforms 45.34% of its industry peers.
A Quick Ratio of 1.07 indicates that ARCC should not have too much problems paying its short term obligations.
ARCC has a Quick ratio (1.07) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
The earnings per share for ARCC have decreased strongly by -11.98% in the last year.
The Earnings Per Share has been growing slightly by 4.06% on average over the past years.
ARCC shows a small growth in Revenue. In the last year, the Revenue has grown by 6.85%.
Measured over the past years, ARCC shows a quite strong growth in Revenue. The Revenue has been growing by 14.37% on average per year.
EPS 1Y (TTM)-11.98%
EPS 3Y5.05%
EPS 5Y4.06%
EPS Q2Q%-18.03%
Revenue 1Y (TTM)6.85%
Revenue growth 3Y18%
Revenue growth 5Y14.37%
Sales Q2Q%7.02%
3.2 Future
Based on estimates for the next years, ARCC will show a decrease in Earnings Per Share. The EPS will decrease by -5.50% on average per year.
The Revenue is expected to grow by 1.58% on average over the next years.
EPS Next Y-11.94%
EPS Next 2Y-7.12%
EPS Next 3Y-5.5%
EPS Next 5YN/A
Revenue Next Year0.29%
Revenue Next 2Y2.63%
Revenue Next 3Y1.58%
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
Based on the Price/Earnings ratio of 9.38, the valuation of ARCC can be described as reasonable.
ARCC's Price/Earnings ratio is a bit cheaper when compared to the industry. ARCC is cheaper than 73.31% of the companies in the same industry.
When comparing the Price/Earnings ratio of ARCC to the average of the S&P500 Index (27.77), we can say ARCC is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 9.94, the valuation of ARCC can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ARCC indicates a somewhat cheap valuation: ARCC is cheaper than 69.49% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.23, ARCC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.38 | ||
| Fwd PE | 9.94 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
A cheap valuation may be justified as ARCC's earnings are expected to decrease with -5.50% in the coming years.
PEG (NY)N/A
PEG (5Y)2.31
EPS Next 2Y-7.12%
EPS Next 3Y-5.5%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 9.83%, ARCC is a good candidate for dividend investing.
ARCC's Dividend Yield is a higher than the industry average which is at 8.51.
Compared to an average S&P500 Dividend Yield of 2.36, ARCC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.83% |
5.2 History
The dividend of ARCC has a limited annual growth rate of 2.32%.
ARCC has been paying a dividend for at least 10 years, so it has a reliable track record.
ARCC has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)2.32%
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
ARCC pays out 89.80% of its income as dividend. 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.
DP89.8%
EPS Next 2Y-7.12%
EPS Next 3Y-5.5%
NASDAQ:ARCC (10/22/2025, 3:22:09 PM)
19.975
+0.07 (+0.33%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners32.38%
Inst Owner Change-16.58%
Ins Owners0.47%
Ins Owner Change0%
Market Cap14.09B
Revenue(TTM)3.01B
Net Income(TTM)1.35B
Analysts84
Price Target23.76 (18.95%)
Short Float %2.48%
Short Ratio4.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.83% |
Yearly Dividend1.82
Dividend Growth(5Y)2.32%
DP89.8%
Div Incr Years0
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-6.01%
Min EPS beat(2)-8.8%
Max EPS beat(2)-3.22%
EPS beat(4)0
Avg EPS beat(4)-5.78%
Min EPS beat(4)-8.8%
Max EPS beat(4)-3.22%
EPS beat(8)2
Avg EPS beat(8)-2.59%
EPS beat(12)4
Avg EPS beat(12)-1.36%
EPS beat(16)7
Avg EPS beat(16)-0.34%
Revenue beat(2)1
Avg Revenue beat(2)-1.26%
Min Revenue beat(2)-7.65%
Max Revenue beat(2)5.13%
Revenue beat(4)1
Avg Revenue beat(4)-2.41%
Min Revenue beat(4)-7.65%
Max Revenue beat(4)5.13%
Revenue beat(8)3
Avg Revenue beat(8)0.29%
Revenue beat(12)5
Avg Revenue beat(12)0.84%
Revenue beat(16)8
Avg Revenue beat(16)0.93%
PT rev (1m)0%
PT rev (3m)1.67%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)-1.11%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)-0.98%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.92%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.38 | ||
| Fwd PE | 9.94 | ||
| P/S | 4.68 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1 | ||
| P/tB | 1 | ||
| EV/EBITDA | N/A |
EPS(TTM)2.13
EY10.66%
EPS(NY)2.01
Fwd EY10.06%
FCF(TTM)-1.85
FCFYN/A
OCF(TTM)-1.85
OCFYN/A
SpS4.27
BVpS19.9
TBVpS19.9
PEG (NY)N/A
PEG (5Y)2.31
Graham Number30.88
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.65% | ||
| ROE | 9.64% | ||
| ROCE | 5.17% | ||
| ROIC | 4.09% | ||
| ROICexc | 4.15% | ||
| ROICexgc | 4.18% | ||
| OM | 48.72% | ||
| PM (TTM) | 44.94% | ||
| GM | 50.28% | ||
| FCFM | N/A |
ROA(3y)4.82%
ROA(5y)4.99%
ROE(3y)10.42%
ROE(5y)11.14%
ROIC(3y)4.28%
ROIC(5y)4%
ROICexc(3y)4.37%
ROICexc(5y)4.08%
ROICexgc(3y)4.39%
ROICexgc(5y)4.1%
ROCE(3y)5.42%
ROCE(5y)5.06%
ROICexgc growth 3Y12.39%
ROICexgc growth 5Y-0.77%
ROICexc growth 3Y12.35%
ROICexc growth 5Y-0.78%
OM growth 3Y5.28%
OM growth 5Y-1.82%
PM growth 3Y-16.07%
PM growth 5Y-0.39%
GM growth 3Y4.55%
GM growth 5Y-1.61%
F-Score2
Asset Turnover0.1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.01 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 2.02 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 0.87 |
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)-11.98%
EPS 3Y5.05%
EPS 5Y4.06%
EPS Q2Q%-18.03%
EPS Next Y-11.94%
EPS Next 2Y-7.12%
EPS Next 3Y-5.5%
EPS Next 5YN/A
Revenue 1Y (TTM)6.85%
Revenue growth 3Y18%
Revenue growth 5Y14.37%
Sales Q2Q%7.02%
Revenue Next Year0.29%
Revenue Next 2Y2.63%
Revenue Next 3Y1.58%
Revenue Next 5YN/A
EBIT growth 1Y6.54%
EBIT growth 3Y24.22%
EBIT growth 5Y12.28%
EBIT Next Year-98.78%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-369.83%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-369.83%
OCF growth 3YN/A
OCF growth 5YN/A