ARES CAPITAL CORP (ARCC) Fundamental Analysis & Valuation

NASDAQ:ARCC • US04010L1035

Current stock price

17.45 USD
-0.47 (-2.62%)
At close:
17.4761 USD
+0.03 (+0.15%)
After Hours:

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.
  • ARCC had positive earnings in each of the past 5 years.
  • 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 Return On Assets of 4.16%. This is in the better half of the industry: ARCC outperforms 64.85% of its industry peers.
  • ARCC has a Return On Equity (9.07%) which is comparable to the rest of the industry.
  • ARCC has a Return On Invested Capital (3.78%) which is comparable to the rest of the industry.
  • ARCC had an Average Return On Invested Capital over the past 3 years of 4.16%. This is below the industry average of 7.28%.
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

  • ARCC's Profit Margin of 42.56% is amongst the best of the industry. ARCC outperforms 87.45% of its industry peers.
  • ARCC's Profit Margin has improved in the last couple of years.
  • ARCC's Operating Margin of 47.77% is amongst the best of the industry. ARCC outperforms 85.36% of its industry peers.
  • In the last couple of years the Operating Margin of ARCC has declined.
  • ARCC has a Gross Margin of 49.44%. This is comparable to the rest of the industry: ARCC outperforms 56.90% of its industry peers.
  • ARCC's Gross Margin has declined in the last couple of years.
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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ROAROEROICOperating and Profit MarginShow most profitable peers

2

2. ARCC Health Analysis

2.1 Basic Checks

  • ARCC has more shares outstanding than it did 1 year ago.
  • ARCC has more shares outstanding than it did 5 years ago.
  • The debt/assets ratio for ARCC is higher compared to a year ago.
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.
  • Looking at the Altman-Z score, with a value of 0.77, ARCC is in line with its industry, outperforming 51.46% of the companies in the same industry.
  • ARCC has a Debt/Equity ratio of 1.12. This is a high value indicating a heavy dependency on external financing.
  • The Debt to Equity ratio of ARCC (1.12) is comparable to the rest of the 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

  • ARCC has a Current 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.
  • ARCC's Current ratio of 1.67 is fine compared to the rest of the industry. ARCC outperforms 70.71% of its industry peers.
  • A Quick Ratio of 1.67 indicates that ARCC should not have too much problems paying its short term obligations.
  • ARCC's Quick ratio of 1.67 is fine compared to the rest of the industry. ARCC outperforms 70.71% of its industry peers.
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

  • The earnings per share for ARCC have decreased strongly by -18.03% in the last year.
  • Measured over the past 5 years, ARCC shows a small growth in Earnings Per Share. The EPS has been growing by 2.00% on average per year.
  • The Revenue has been growing slightly by 2.07% in the past year.
  • 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

  • The Earnings Per Share is expected to decrease by -1.68% on average over the next years.
  • 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 Year4.14%
Revenue Next 2Y3.44%
Revenue Next 3Y-3.21%
Revenue Next 5YN/A

3.3 Evolution

  • When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
  • 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 9.14.
  • 66.95% of the companies in the same industry are more expensive than ARCC, based on the Price/Earnings ratio.
  • Compared to an average S&P500 Price/Earnings ratio of 24.88, ARCC is valued rather cheaply.
  • A Price/Forward Earnings ratio of 8.83 indicates a reasonable valuation of ARCC.
  • ARCC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ARCC is cheaper than 72.38% of the companies in the same industry.
  • ARCC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.19.
Industry RankSector Rank
PE 9.14
Fwd PE 8.83
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 ARCC does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)2.61
PEG (5Y)4.57
EPS Next 2Y1.31%
EPS Next 3Y-1.68%

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

5

5. ARCC Dividend Analysis

5.1 Amount

  • With a Yearly Dividend Yield of 10.71%, ARCC is a good candidate for dividend investing.
  • Compared to an average industry Dividend Yield of 6.76, ARCC pays a bit more dividend than its industry peers.
  • Compared to an average S&P500 Dividend Yield of 1.89, ARCC pays a better dividend.
Industry RankSector Rank
Dividend Yield 10.71%

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 last 3 years.
Dividend Growth(5Y)2.72%
Div Incr Years0
Div Non Decr Years4
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

  • ARCC pays out 97.31% 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.
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 (3/27/2026, 8:01:01 PM)

After market: 17.4761 +0.03 (+0.15%)

17.45

-0.47 (-2.62%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)02-04
Earnings (Next)04-27
Inst Owners34.47%
Inst Owner Change6.02%
Ins Owners0.47%
Ins Owner Change1.47%
Market Cap12.53B
Revenue(TTM)3.05B
Net Income(TTM)1.30B
Analysts83
Price Target22.57 (29.34%)
Short Float %4.14%
Short Ratio3.89
Dividend
Industry RankSector Rank
Dividend Yield 10.71%
Yearly Dividend1.82
Dividend Growth(5Y)2.72%
DP97.31%
Div Incr Years0
Div Non Decr Years4
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)-1.86%
PT rev (3m)-1.65%
EPS NQ rev (1m)-0.3%
EPS NQ rev (3m)-1.34%
EPS NY rev (1m)-0.33%
EPS NY rev (3m)-0.62%
Revenue NQ rev (1m)-0.22%
Revenue NQ rev (3m)-1.02%
Revenue NY rev (1m)-0.64%
Revenue NY rev (3m)-1.55%
Valuation
Industry RankSector Rank
PE 9.14
Fwd PE 8.83
P/S 4.11
P/FCF N/A
P/OCF N/A
P/B 0.88
P/tB 0.88
EV/EBITDA N/A
EPS(TTM)1.91
EY10.95%
EPS(NY)1.98
Fwd EY11.33%
FCF(TTM)-2.39
FCFYN/A
OCF(TTM)-2.39
OCFYN/A
SpS4.25
BVpS19.94
TBVpS19.94
PEG (NY)2.61
PEG (5Y)4.57
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 Year4.14%
Revenue Next 2Y3.44%
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.


Can you provide the profitability details for ARES CAPITAL CORP?

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


What is the valuation of ARES CAPITAL CORP based on its PE and PB ratios?

The Price/Earnings (PE) ratio for ARES CAPITAL CORP (ARCC) is 9.14 and the Price/Book (PB) ratio is 0.88.


How financially healthy is ARES CAPITAL CORP?

The financial health rating of ARES CAPITAL CORP (ARCC) is 2 / 10.