ARES MANAGEMENT CORP - A (ARES) Stock Fundamental Analysis
USA - NYSE:ARES - US03990B1017 - Common Stock
141.87 USD
+0.63 (+0.45%)
142.97 USD
+1.1 (+0.78%)
We assign a fundamental rating of 4 out of 10 to ARES. ARES was compared to 237 industry peers in the Capital Markets industry. Both the profitability and financial health of ARES have multiple concerns. ARES is valued quite expensive, but it does show an excellent growth.
1. Profitability
1.1 Basic Checks
In the past year ARES was profitable.
ARES had a positive operating cash flow in the past year.
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
The Return On Assets of ARES (1.36%) is worse than 63.29% of its industry peers.
With a Return On Equity value of 8.47%, ARES perfoms like the industry average, outperforming 46.84% of the companies in the same industry.
With a Return On Invested Capital value of 3.79%, ARES perfoms like the industry average, outperforming 50.63% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ARES is below the industry average of 7.58%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.36% | ||
| ROE | 8.47% | ||
| ROIC | 3.79% |
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 7.65%, ARES is not doing good in the industry: 62.87% of the companies in the same industry are doing better.
ARES's Profit Margin has improved in the last couple of years.
ARES's Operating Margin of 19.52% is in line compared to the rest of the industry. ARES outperforms 42.19% of its industry peers.
ARES's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.52% | ||
| PM (TTM) | 7.65% | ||
| 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
The number of shares outstanding for ARES has been increased compared to 1 year ago.
Compared to 5 years ago, ARES has more shares outstanding
Compared to 1 year ago, ARES has an improved debt to assets ratio.
2.2 Solvency
ARES has an Altman-Z score of 1.26. This is a bad value and indicates that ARES is not financially healthy and even has some risk of bankruptcy.
ARES's Altman-Z score of 1.26 is in line compared to the rest of the industry. ARES outperforms 59.92% of its industry peers.
ARES has a debt to FCF ratio of 3.21. This is a good value and a sign of high solvency as ARES would need 3.21 years to pay back of all of its debts.
The Debt to FCF ratio of ARES (3.21) is better than 80.17% of its industry peers.
ARES has a Debt/Equity ratio of 2.93. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 2.93, ARES is doing worse than 82.70% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.93 | ||
| Debt/FCF | 3.21 | ||
| Altman-Z | 1.26 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
ARES has a Current Ratio of 0.31. This is a bad value and indicates that ARES is not financially healthy enough and could expect problems in meeting its short term obligations.
ARES has a worse Current ratio (0.31) than 81.01% of its industry peers.
ARES has a Quick Ratio of 0.31. This is a bad value and indicates that ARES is not financially healthy enough and could expect problems in meeting its short term obligations.
ARES has a Quick ratio of 0.31. This is amonst the worse of the industry: ARES underperforms 81.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.31 | ||
| Quick Ratio | 0.31 |
3. Growth
3.1 Past
ARES shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.27%, which is quite good.
Measured over the past years, ARES shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.77% on average per year.
ARES shows a strong growth in Revenue. In the last year, the Revenue has grown by 49.87%.
The Revenue has been growing by 17.09% on average over the past years. This is quite good.
EPS 1Y (TTM)12.27%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%4.04%
Revenue 1Y (TTM)49.87%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%71.19%
3.2 Future
ARES is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 23.49% yearly.
ARES is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.17% yearly.
EPS Next Y28.56%
EPS Next 2Y28.03%
EPS Next 3Y25.72%
EPS Next 5Y23.49%
Revenue Next Year28.24%
Revenue Next 2Y23.21%
Revenue Next 3Y22.41%
Revenue Next 5Y15.17%
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 accelerating.
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
The Price/Earnings ratio is 32.99, which means the current valuation is very expensive for ARES.
73.42% of the companies in the same industry are cheaper than ARES, based on the Price/Earnings ratio.
ARES's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 27.40.
A Price/Forward Earnings ratio of 21.80 indicates a rather expensive valuation of ARES.
Based on the Price/Forward Earnings ratio, ARES is valued a bit more expensive than 60.76% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.94, ARES is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.99 | ||
| Fwd PE | 21.8 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARES indicates a somewhat cheap valuation: ARES is cheaper than 61.60% of the companies listed in the same industry.
ARES's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ARES is cheaper than 69.62% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.65 | ||
| EV/EBITDA | 52.13 |
4.3 Compensation for Growth
ARES's 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 25.72% in the coming years.
PEG (NY)1.16
PEG (5Y)1.76
EPS Next 2Y28.03%
EPS Next 3Y25.72%
5. Dividend
5.1 Amount
ARES has a Yearly Dividend Yield of 3.17%.
The stock price of ARES dropped by -22.53% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 8.24, 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 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.17% |
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.
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
ARES pays out 419.97% of its income as dividend. This is not a sustainable payout ratio.
ARES's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP419.97%
EPS Next 2Y28.03%
EPS Next 3Y25.72%
141.87
+0.63 (+0.45%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners88.15%
Inst Owner Change-0.13%
Ins Owners2.97%
Ins Owner Change-0.84%
Market Cap46.35B
Analysts77.39
Price Target199.45 (40.59%)
Short Float %4.13%
Short Ratio5.57
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.17% |
Yearly Dividend4.22
Dividend Growth(5Y)5.8%
DP419.97%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.99%
Min EPS beat(2)-6.98%
Max EPS beat(2)12.95%
EPS beat(4)1
Avg EPS beat(4)-0.6%
Min EPS beat(4)-7.09%
Max EPS beat(4)12.95%
EPS beat(8)2
Avg EPS beat(8)-2.01%
EPS beat(12)4
Avg EPS beat(12)-1.34%
EPS beat(16)6
Avg EPS beat(16)-0.16%
Revenue beat(2)1
Avg Revenue beat(2)15.88%
Min Revenue beat(2)-4.32%
Max Revenue beat(2)36.08%
Revenue beat(4)3
Avg Revenue beat(4)19.07%
Min Revenue beat(4)-4.32%
Max Revenue beat(4)38.08%
Revenue beat(8)4
Avg Revenue beat(8)9.71%
Revenue beat(12)7
Avg Revenue beat(12)13.25%
Revenue beat(16)10
Avg Revenue beat(16)21.39%
PT rev (1m)0%
PT rev (3m)8.47%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.06%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.27%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.19%
Revenue NY rev (1m)0%
Revenue NY rev (3m)3.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.99 | ||
| Fwd PE | 21.8 | ||
| P/S | 9.6 | ||
| P/FCF | 11.65 | ||
| P/OCF | 11.42 | ||
| P/B | 10.63 | ||
| P/tB | N/A | ||
| EV/EBITDA | 52.13 |
EPS(TTM)4.3
EY3.03%
EPS(NY)6.51
Fwd EY4.59%
FCF(TTM)12.18
FCFY8.58%
OCF(TTM)12.42
OCFY8.76%
SpS14.78
BVpS13.35
TBVpS-3.96
PEG (NY)1.16
PEG (5Y)1.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.36% | ||
| ROE | 8.47% | ||
| ROCE | 4.36% | ||
| ROIC | 3.79% | ||
| ROICexc | 4.08% | ||
| ROICexgc | 6.09% | ||
| OM | 19.52% | ||
| PM (TTM) | 7.65% | ||
| GM | N/A | ||
| FCFM | 82.39% |
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%
ROICexcg growth 3Y1.38%
ROICexcg 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-Score5
Asset Turnover0.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.93 | ||
| Debt/FCF | 3.21 | ||
| Debt/EBITDA | 11.61 | ||
| Cap/Depr | 51.14% | ||
| Cap/Sales | 1.68% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 368.62% | ||
| Profit Quality | 1076.46% | ||
| Current Ratio | 0.31 | ||
| Quick Ratio | 0.31 | ||
| Altman-Z | 1.26 |
F-Score5
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)12.27%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%4.04%
EPS Next Y28.56%
EPS Next 2Y28.03%
EPS Next 3Y25.72%
EPS Next 5Y23.49%
Revenue 1Y (TTM)49.87%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%71.19%
Revenue Next Year28.24%
Revenue Next 2Y23.21%
Revenue Next 3Y22.41%
Revenue Next 5Y15.17%
EBIT growth 1Y8.39%
EBIT growth 3Y4.56%
EBIT growth 5Y26.83%
EBIT Next Year44.29%
EBIT Next 3Y31.79%
EBIT Next 5YN/A
FCF growth 1Y2130.82%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y2678.78%
OCF growth 3YN/A
OCF growth 5YN/A