ARCC

Ares CapitalNasdaqGS:ARCC Stock Report

Market Cap

US$8.9b

7D

-1.9%

1Y

44.1%

Updated

18 Sep, 2021

Data

Company Financials +
ARCC fundamental analysis
Snowflake Score
Valuation5/6
Future Growth0/6
Past Performance4/6
Financial Health2/6
Dividends6/6

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

ARCCIndustryMarket
7 Day-1.9%-0.9%-0.6%
30 Day1.9%2.3%2.0%
90 Day4.7%8.4%4.7%
1 Year56.9%44.1%65.2%61.9%35.8%33.8%
3 Year52.8%14.8%78.5%65.5%60.0%50.1%
5 Year104.4%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

How do Ares Capital's earnings and revenue compare to its market cap?
ARCC fundamental statistics
Market CapUS$8.87b
Earnings (TTM)US$1.67b
Revenue (TTM)US$1.64b

5.3x

P/E Ratio

5.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
ARCC income statement (TTM)
RevenueUS$1.64b
Cost of RevenueUS$0
Gross ProfitUS$1.64b
Expenses-US$29.00m
EarningsUS$1.67b

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)3.90
Gross Margin100.00%
Net Profit Margin101.77%
Debt/Equity Ratio115.8%

How did ARCC perform over the long term?

See historical performance and comparison

Dividends

8.2%

Current Dividend Yield

41%

Payout Ratio

Valuation

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

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/18 22:04
End of Day Share Price2021/09/17 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


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.