ARES MANAGEMENT CORP - A (ARES) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARES - US03990B1017 - Common Stock
164.26 USD
-1.2 (-0.73%)
176.38 USD
+12.12 (+7.38%)
Overall ARES gets a fundamental rating of 4 out of 10. We evaluated ARES against 237 industry peers in the Capital Markets industry. While ARES is still in line with the averages on profitability rating, there are concerns on its financial health. ARES shows excellent growth, but is valued quite expensive already.
1. Profitability
1.1 Basic Checks
In the past year ARES was profitable.
In the past year ARES had a positive cash flow from operations.
ARES had positive earnings in each of the past 5 years.
ARES had negative operating cash flow in 4 of the past 5 years.
1.2 Ratios
ARES's Return On Assets of 1.89% is in line compared to the rest of the industry. ARES outperforms 43.46% of its industry peers.
Looking at the Return On Equity, with a value of 11.44%, ARES is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
The Return On Invested Capital of ARES (4.41%) is better than 62.87% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ARES is below the industry average of 6.99%.
The last Return On Invested Capital (4.41%) for ARES is above the 3 year average (3.87%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.89% | ||
| ROE | 11.44% | ||
| ROIC | 4.41% |
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
The Profit Margin of ARES (9.56%) is worse than 62.45% of its industry peers.
In the last couple of years the Profit Margin of ARES has grown nicely.
ARES has a Operating Margin of 19.56%. This is comparable to the rest of the industry: ARES outperforms 45.99% of its industry peers.
In the last couple of years the Operating Margin of ARES has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.56% | ||
| PM (TTM) | 9.56% | ||
| 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.
Compared to 5 years ago, ARES has more shares outstanding
The debt/assets ratio for ARES has been reduced compared to a year ago.
2.2 Solvency
ARES has an Altman-Z score of 1.48. This is a bad value and indicates that ARES is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of ARES (1.48) is better than 62.87% of its industry peers.
The Debt to FCF ratio of ARES is 2.68, which is a good value as it means it would take ARES, 2.68 years of fcf income to pay off all of its debts.
ARES's Debt to FCF ratio of 2.68 is fine compared to the rest of the industry. ARES outperforms 79.75% of its industry peers.
ARES has a Debt/Equity ratio of 2.69. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 2.69, ARES is doing worse than 82.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.69 | ||
| Debt/FCF | 2.68 | ||
| Altman-Z | 1.48 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 0.26 indicates that ARES may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.26, ARES is doing worse than 84.81% of the companies in the same industry.
A Quick Ratio of 0.26 indicates that ARES may have some problems paying its short term obligations.
With a Quick ratio value of 0.26, ARES is not doing good in the industry: 84.81% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.26 | ||
| Quick Ratio | 0.26 |
3. Growth
3.1 Past
ARES shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.94%, which is quite good.
ARES shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.77% yearly.
The Revenue has grown by 45.54% in the past year. This is a very strong growth!
Measured over the past years, ARES shows a quite strong growth in Revenue. The Revenue has been growing by 17.09% on average per year.
EPS 1Y (TTM)14.94%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%25.26%
Revenue 1Y (TTM)45.54%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%0.64%
3.2 Future
The Earnings Per Share is expected to grow by 21.70% on average over the next years. This is a very strong growth
ARES is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 20.07% yearly.
EPS Next Y29.38%
EPS Next 2Y28.98%
EPS Next 3Y25.87%
EPS Next 5Y21.7%
Revenue Next Year24.47%
Revenue Next 2Y23.73%
Revenue Next 3Y22.17%
Revenue Next 5Y20.07%
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 stable.
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
Based on the Price/Earnings ratio of 36.18, the valuation of ARES can be described as expensive.
Based on the Price/Earnings ratio, ARES is valued a bit more expensive than 75.53% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.34. ARES is valued slightly more expensive when compared to this.
The Price/Forward Earnings ratio is 24.87, which indicates a rather expensive current valuation of ARES.
64.98% of the companies in the same industry are cheaper than ARES, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of ARES to the average of the S&P500 Index (23.56), we can say ARES is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.18 | ||
| Fwd PE | 24.87 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARES is valued a bit cheaper than the industry average as 61.60% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARES indicates a somewhat cheap valuation: ARES is cheaper than 69.20% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.95 | ||
| EV/EBITDA | 53.27 |
4.3 Compensation for Growth
ARES's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ARES's earnings are expected to grow with 25.87% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.23
PEG (5Y)1.93
EPS Next 2Y28.98%
EPS Next 3Y25.87%
5. Dividend
5.1 Amount
ARES has a Yearly Dividend Yield of 2.75%. Purely for dividend investing, there may be better candidates out there.
ARES's Dividend Yield is comparable with the industry average which is at 8.30.
ARES's Dividend Yield is comparable with the S&P500 average which is at 2.31.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.75% |
5.2 History
The dividend of ARES has a limited annual growth rate of 5.80%.
ARES has been paying a dividend for at least 10 years, so it has 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
320.11% of the earnings are spent on dividend by ARES. This is not a sustainable payout ratio.
The dividend of ARES is growing, but earnings are growing more, so the dividend growth is sustainable.
DP320.11%
EPS Next 2Y28.98%
EPS Next 3Y25.87%
164.26
-1.2 (-0.73%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners84.05%
Inst Owner Change3.47%
Ins Owners2.95%
Ins Owner Change-0.84%
Market Cap53.69B
Revenue(TTM)5.36B
Net Income(TTM)511.84M
Analysts78.33
Price Target189.85 (15.58%)
Short Float %3.21%
Short Ratio3.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.75% |
Yearly Dividend4.22
Dividend Growth(5Y)5.8%
DP320.11%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-3.03%
Min EPS beat(2)-6.98%
Max EPS beat(2)0.92%
EPS beat(4)2
Avg EPS beat(4)-0.05%
Min EPS beat(4)-7.09%
Max EPS beat(4)12.95%
EPS beat(8)3
Avg EPS beat(8)-1.14%
EPS beat(12)5
Avg EPS beat(12)-1.24%
EPS beat(16)7
Avg EPS beat(16)0.06%
Revenue beat(2)2
Avg Revenue beat(2)3.27%
Min Revenue beat(2)0.08%
Max Revenue beat(2)6.46%
Revenue beat(4)3
Avg Revenue beat(4)2.16%
Min Revenue beat(4)-4.32%
Max Revenue beat(4)6.46%
Revenue beat(8)5
Avg Revenue beat(8)6.42%
Revenue beat(12)7
Avg Revenue beat(12)8.82%
Revenue beat(16)10
Avg Revenue beat(16)14.79%
PT rev (1m)0.95%
PT rev (3m)-4.81%
EPS NQ rev (1m)-0.69%
EPS NQ rev (3m)-1.08%
EPS NY rev (1m)0.48%
EPS NY rev (3m)0.64%
Revenue NQ rev (1m)2.37%
Revenue NQ rev (3m)-0.59%
Revenue NY rev (1m)-1.95%
Revenue NY rev (3m)-2.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.18 | ||
| Fwd PE | 24.87 | ||
| P/S | 10.03 | ||
| P/FCF | 11.95 | ||
| P/OCF | 11.78 | ||
| P/B | 12 | ||
| P/tB | N/A | ||
| EV/EBITDA | 53.27 |
EPS(TTM)4.54
EY2.76%
EPS(NY)6.6
Fwd EY4.02%
FCF(TTM)13.74
FCFY8.37%
OCF(TTM)13.95
OCFY8.49%
SpS16.38
BVpS13.69
TBVpS-3.46
PEG (NY)1.23
PEG (5Y)1.93
Graham Number37.39
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.89% | ||
| ROE | 11.44% | ||
| ROCE | 5.06% | ||
| ROIC | 4.41% | ||
| ROICexc | 4.75% | ||
| ROICexgc | 7.2% | ||
| OM | 19.56% | ||
| PM (TTM) | 9.56% | ||
| GM | N/A | ||
| FCFM | 83.89% |
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%
ROICexgc growth 3Y1.38%
ROICexgc 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-Score6
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.69 | ||
| Debt/FCF | 2.68 | ||
| Debt/EBITDA | 9.99 | ||
| Cap/Depr | 41.43% | ||
| Cap/Sales | 1.23% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 377.94% | ||
| Profit Quality | 877.73% | ||
| Current Ratio | 0.26 | ||
| Quick Ratio | 0.26 | ||
| Altman-Z | 1.48 |
F-Score6
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)14.94%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%25.26%
EPS Next Y29.38%
EPS Next 2Y28.98%
EPS Next 3Y25.87%
EPS Next 5Y21.7%
Revenue 1Y (TTM)45.54%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%0.64%
Revenue Next Year24.47%
Revenue Next 2Y23.73%
Revenue Next 3Y22.17%
Revenue Next 5Y20.07%
EBIT growth 1Y6.65%
EBIT growth 3Y4.56%
EBIT growth 5Y26.83%
EBIT Next Year38.48%
EBIT Next 3Y45.54%
EBIT Next 5Y17.23%
FCF growth 1Y5204.16%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y3244.68%
OCF growth 3YN/A
OCF growth 5YN/A
ARES MANAGEMENT CORP - A / ARES FAQ
What is the fundamental rating for ARES stock?
ChartMill assigns a fundamental rating of 4 / 10 to ARES.
What is the valuation status of ARES MANAGEMENT CORP - A (ARES) stock?
ChartMill assigns a valuation rating of 3 / 10 to ARES MANAGEMENT CORP - A (ARES). This can be considered as Overvalued.
How profitable is ARES MANAGEMENT CORP - A (ARES) stock?
ARES MANAGEMENT CORP - A (ARES) has a profitability rating of 4 / 10.
What are the PE and PB ratios of ARES MANAGEMENT CORP - A (ARES) stock?
The Price/Earnings (PE) ratio for ARES MANAGEMENT CORP - A (ARES) is 36.18 and the Price/Book (PB) ratio is 12.
What is the earnings growth outlook for ARES MANAGEMENT CORP - A?
The Earnings per Share (EPS) of ARES MANAGEMENT CORP - A (ARES) is expected to grow by 29.38% in the next year.