ARES MANAGEMENT CORP - A (ARES) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARES - US03990B1017 - Common Stock
159.51 USD
+2.66 (+1.7%)
160 USD
+0.49 (+0.31%)
We assign a fundamental rating of 5 out of 10 to ARES. ARES was compared to 238 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
ARES had positive earnings in the past year.
In the past year ARES had a positive cash flow from operations.
In the past 5 years ARES has always been profitable.
In the past 5 years ARES reported 4 times negative operating cash flow.
1.2 Ratios
With a Return On Assets value of 1.89%, ARES perfoms like the industry average, outperforming 43.70% of the companies in the same industry.
ARES has a Return On Equity of 11.44%. This is in the better half of the industry: ARES outperforms 67.65% of its industry peers.
ARES's Return On Invested Capital of 4.41% is fine compared to the rest of the industry. ARES outperforms 63.45% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ARES is below the industry average of 6.96%.
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
With a Profit Margin value of 9.56%, ARES is not doing good in the industry: 62.18% of the companies in the same industry are doing better.
ARES's Profit Margin has improved in the last couple of years.
ARES has a Operating Margin (19.56%) which is in line with 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.
ARES has more shares outstanding than it did 5 years ago.
The debt/assets ratio for ARES has been reduced compared to a year ago.
2.2 Solvency
ARES has an Altman-Z score of 1.42. 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 (1.42) is better than 63.03% of its industry peers.
ARES has a debt to FCF ratio of 2.68. This is a good value and a sign of high solvency as ARES would need 2.68 years to pay back of all of its debts.
ARES's Debt to FCF ratio of 2.68 is amongst the best of the industry. ARES outperforms 80.25% of its industry peers.
A Debt/Equity ratio of 2.69 is on the high side and indicates that ARES has dependencies on debt financing.
ARES has a Debt to Equity ratio of 2.69. This is amonst the worse of the industry: ARES underperforms 82.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.69 | ||
| Debt/FCF | 2.68 | ||
| Altman-Z | 1.42 |
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.
The Current ratio of ARES (0.26) is worse than 84.45% of its industry peers.
A Quick Ratio of 0.26 indicates that ARES may have some problems paying its short term obligations.
ARES's Quick ratio of 0.26 is on the low side compared to the rest of the industry. ARES is outperformed by 84.03% of its industry peers.
| 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.
Looking at the last year, ARES shows a very strong growth in Revenue. The Revenue has grown by 45.54%.
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
ARES is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.70% yearly.
Based on estimates for the next years, ARES will show a very strong growth in Revenue. The Revenue will grow by 20.07% on average per year.
EPS Next Y28.76%
EPS Next 2Y28.05%
EPS Next 3Y25.42%
EPS Next 5Y21.7%
Revenue Next Year26.95%
Revenue Next 2Y23%
Revenue Next 3Y22.11%
Revenue Next 5Y20.07%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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
A Price/Earnings ratio of 35.13 indicates a quite expensive valuation of ARES.
ARES's Price/Earnings ratio is a bit more expensive when compared to the industry. ARES is more expensive than 75.21% of the companies in the same industry.
ARES is valuated rather expensively when we compare the Price/Earnings ratio to 26.11, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 24.50 indicates a rather expensive valuation of ARES.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ARES indicates a slightly more expensive valuation: ARES is more expensive than 64.29% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 36.21. ARES is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.13 | ||
| Fwd PE | 24.5 |
4.2 Price Multiples
ARES's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ARES is cheaper than 61.76% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARES indicates a somewhat cheap valuation: ARES is cheaper than 69.75% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.61 | ||
| EV/EBITDA | 51.26 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as ARES's earnings are expected to grow with 25.42% in the coming years.
PEG (NY)1.22
PEG (5Y)1.87
EPS Next 2Y28.05%
EPS Next 3Y25.42%
5. Dividend
5.1 Amount
ARES has a Yearly Dividend Yield of 2.90%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 8.39, ARES has a dividend in line with its industry peers.
ARES's Dividend Yield is a higher than the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
5.2 History
The dividend of ARES has a limited annual growth rate of 5.80%.
ARES has paid a dividend for at least 10 years, which is a reliable track record.
ARES has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
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 2Y28.05%
EPS Next 3Y25.42%
159.51
+2.66 (+1.7%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners88.15%
Inst Owner Change3.46%
Ins Owners2.97%
Ins Owner Change-0.84%
Market Cap52.14B
Revenue(TTM)5.36B
Net Income(TTM)511.84M
Analysts78.33
Price Target189.85 (19.02%)
Short Float %3.28%
Short Ratio3.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
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)-4.81%
PT rev (3m)-3.81%
EPS NQ rev (1m)-1.08%
EPS NQ rev (3m)-1.17%
EPS NY rev (1m)0.18%
EPS NY rev (3m)0.16%
Revenue NQ rev (1m)-0.59%
Revenue NQ rev (3m)0.07%
Revenue NY rev (1m)-1.75%
Revenue NY rev (3m)-0.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.13 | ||
| Fwd PE | 24.5 | ||
| P/S | 9.74 | ||
| P/FCF | 11.61 | ||
| P/OCF | 11.44 | ||
| P/B | 11.65 | ||
| P/tB | N/A | ||
| EV/EBITDA | 51.26 |
EPS(TTM)4.54
EY2.85%
EPS(NY)6.51
Fwd EY4.08%
FCF(TTM)13.74
FCFY8.62%
OCF(TTM)13.95
OCFY8.74%
SpS16.38
BVpS13.69
TBVpS-3.46
PEG (NY)1.22
PEG (5Y)1.87
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 | 1.42 |
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 Y28.76%
EPS Next 2Y28.05%
EPS Next 3Y25.42%
EPS Next 5Y21.7%
Revenue 1Y (TTM)45.54%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%0.64%
Revenue Next Year26.95%
Revenue Next 2Y23%
Revenue Next 3Y22.11%
Revenue Next 5Y20.07%
EBIT growth 1Y6.65%
EBIT growth 3Y4.56%
EBIT growth 5Y26.83%
EBIT Next Year44.29%
EBIT Next 3Y31.79%
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 5 / 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 35.13 and the Price/Book (PB) ratio is 11.65.
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 28.76% in the next year.