| Snowflake Score | |
|---|---|
| Valuation | 5/6 |
| Future Growth | 0/6 |
| Past Performance | 4/6 |
| Financial Health | 2/6 |
| Dividends | 6/6 |
ARCC Overview
Ares Capital Corporation is a business development company specializing in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle market companies.
Share Price & News
How has Ares Capital's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: ARCC is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.
Volatility Over Time: ARCC's weekly volatility (2%) has been stable over the past year.
Market Performance
7 Day Return
-1.9%
ARCC
-0.9%
US Capital Markets
-0.6%
US Market
1 Year Return
44.1%
ARCC
61.9%
US Capital Markets
33.8%
US Market
Return vs Industry: ARCC underperformed the US Capital Markets industry which returned 61.9% over the past year.
Return vs Market: ARCC exceeded the US Market which returned 33.8% over the past year.
Shareholder returns
| ARCC | Industry | Market | |
|---|---|---|---|
| 7 Day | -1.9% | -0.9% | -0.6% |
| 30 Day | 1.9% | 2.3% | 2.0% |
| 90 Day | 4.7% | 8.4% | 4.7% |
| 1 Year | 56.9%44.1% | 65.2%61.9% | 35.8%33.8% |
| 3 Year | 52.8%14.8% | 78.5%65.5% | 60.0%50.1% |
| 5 Year | 104.4%27.8% | 174.6%141.7% | 123.0%98.7% |
Long-Term Price Volatility Vs. Market
How volatile is Ares Capital's share price compared to the market and industry in the last 5 years?
Simply Wall St News
No news available
Ares Capital Fundamentals Summary
| ARCC fundamental statistics | |
|---|---|
| Market Cap | US$8.87b |
| Earnings (TTM) | US$1.67b |
| Revenue (TTM) | US$1.64b |
5.3x
P/E Ratio5.4x
P/S RatioIs ARCC overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| ARCC income statement (TTM) | |
|---|---|
| Revenue | US$1.64b |
| Cost of Revenue | US$0 |
| Gross Profit | US$1.64b |
| Expenses | -US$29.00m |
| Earnings | US$1.67b |
Last Reported Earnings
Jun 30, 2021
Next Earnings Date
n/a
| Earnings per share (EPS) | 3.90 |
| Gross Margin | 100.00% |
| Net Profit Margin | 101.77% |
| Debt/Equity Ratio | 115.8% |
How did ARCC perform over the long term?
See historical performance and comparisonDividends
8.2%
Current Dividend Yield41%
Payout RatioValuation
Is Ares Capital undervalued compared to its fair value and its price relative to the market?
22.4%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: ARCC ($19.9) is trading below our estimate of fair value ($25.66)
Significantly Below Fair Value: ARCC is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: ARCC is good value based on its PE Ratio (5.3x) compared to the US Capital Markets industry average (15.2x).
PE vs Market: ARCC is good value based on its PE Ratio (5.3x) compared to the US market (17.8x).
Price to Earnings Growth Ratio
PEG Ratio: ARCC's earnings are forecast to decline next year, so we can't calculate its PEG ratio.
Price to Book Ratio
PB vs Industry: ARCC is good value based on its PB Ratio (1.1x) compared to the US Capital Markets industry average (61x).
Future Growth
How is Ares Capital forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?
-28.1%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: ARCC's earnings are forecast to decline over the next 3 years (-28.1% per year).
Earnings vs Market: ARCC's earnings are forecast to decline over the next 3 years (-28.1% per year).
High Growth Earnings: ARCC's earnings are forecast to decline over the next 3 years.
Revenue vs Market: ARCC's revenue (3.3% per year) is forecast to grow slower than the US market (9.8% per year).
High Growth Revenue: ARCC's revenue (3.3% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: ARCC's Return on Equity is forecast to be low in 3 years time (10%).
Past Performance
How has Ares Capital performed over the past 5 years?
12.2%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: ARCC has a large one-off gain of $982.0M impacting its June 30 2021 financial results.
Growing Profit Margin: ARCC's current net profit margins are higher than last year (2.9%).
Past Earnings Growth Analysis
Earnings Trend: ARCC's earnings have grown by 12.2% per year over the past 5 years.
Accelerating Growth: ARCC's earnings growth over the past year (3695.5%) exceeds its 5-year average (12.2% per year).
Earnings vs Industry: ARCC earnings growth over the past year (3695.5%) exceeded the Capital Markets industry 77.4%.
Return on Equity
High ROE: Whilst ARCC's Return on Equity (20.67%) is high, this metric is skewed due to their high level of debt.
Financial Health
How is Ares Capital's financial position?
Financial Position Analysis
Short Term Liabilities: ARCC's short term assets ($746.0M) exceed its short term liabilities ($514.0M).
Long Term Liabilities: ARCC's short term assets ($746.0M) do not cover its long term liabilities ($9.4B).
Debt to Equity History and Analysis
Debt Level: ARCC's debt to equity ratio (115.8%) is considered high.
Reducing Debt: ARCC's debt to equity ratio has increased from 72.5% to 115.8% over the past 5 years.
Debt Coverage: ARCC's operating cash flow is negative, therefore debt is not well covered.
Interest Coverage: ARCC's interest payments on its debt are well covered by EBIT (3.4x coverage).
Balance Sheet
Dividend
What is Ares Capital current dividend yield, its reliability and sustainability?
8.24%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: ARCC's dividend (8.24%) is higher than the bottom 25% of dividend payers in the US market (1.33%).
High Dividend: ARCC's dividend (8.24%) is in the top 25% of dividend payers in the US market (3.6%)
Stability and Growth of Payments
Stable Dividend: ARCC's dividends per share have been stable in the past 10 years.
Growing Dividend: ARCC's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its reasonably low payout ratio (41.1%), ARCC's dividend payments are well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: ARCC's dividends in 3 years are forecast to be covered by earnings (89.6% payout ratio).
Management
How experienced are the management team and are they aligned to shareholders interests?
7.2yrs
Average management tenure
CEO
Robert DeVeer (48 yo)
7.17yrs
Tenure
Mr. Robert Kipp DeVeer, III, serves as Director of Ares Management Corporation since February 13, 2020. Mr. DeVeer is Director at Ares Capital Corporation since 2015 and has also been its Chief Executive O...
Leadership Team
Experienced Management: ARCC's management team is seasoned and experienced (7.2 years average tenure).
Board Members
Experienced Board: ARCC's board of directors are considered experienced (9 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.5%.
Top Shareholders
Company Information
Ares Capital Corporation's company bio, employee growth, exchange listings and data sources
Key Information
- Name: Ares Capital Corporation
- Ticker: ARCC
- Exchange: NasdaqGS
- Founded: 2004
- Industry: Asset Management and Custody Banks
- Sector: Diversified Financials
- Market Cap: US$8.873b
- Shares outstanding: 445.87m
- Website: https://www.arescapitalcorp.com
Location
- Ares Capital Corporation
- 245 Park Avenue
- 44th Floor
- New York
- New York
- 10167
- United States
Listings
Biography
Ares Capital Corporation is a business development company specializing in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle marke...
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2021/09/18 22:04 |
| End of Day Share Price | 2021/09/17 00:00 |
| Earnings | 2021/06/30 |
| Annual Earnings | 2020/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.