NasdaqGS:ARCC

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Executive Summary

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. More Details

Rewards


Snowflake Analysis


Similar 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 +/- 3% a week.

Volatility Over Time: ARCC's weekly volatility has decreased from 9% to 3% over the past year.


Market Performance


7 Day Return

2.1%

ARCC

-2.6%

US Capital Markets

-4.6%

US Market


1 Year Return

6.6%

ARCC

38.0%

US Capital Markets

38.5%

US Market

Return vs Industry: ARCC underperformed the US Capital Markets industry which returned 36.4% over the past year.

Return vs Market: ARCC underperformed the US Market which returned 38.9% over the past year.


Shareholder returns

ARCCIndustryMarket
7 Day2.1%-2.6%-4.6%
30 Day4.9%8.5%0.6%
90 Day8.9%14.9%1.9%
1 Year18.8%6.6%41.3%38.0%41.5%38.5%
3 Year56.5%16.7%39.5%29.1%56.7%46.7%
5 Year110.1%29.2%140.6%110.9%123.5%98.6%

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

Valuation

Is Ares Capital undervalued compared to its fair value and its price relative to the market?

19.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ARCC ($18.33) is trading below our estimate of fair value ($22.86)

Significantly Below Fair Value: ARCC is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ARCC is good value based on its PE Ratio (16.1x) compared to the US Capital Markets industry average (23.4x).

PE vs Market: ARCC is good value based on its PE Ratio (16.1x) compared to the US market (21.2x).


Price to Earnings Growth Ratio

PEG Ratio: ARCC is good value based on its PEG Ratio (0.8x)


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 (10.9x).

Future Growth

How is Ares Capital forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

19.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARCC's forecast earnings growth (19.7% per year) is above the savings rate (2%).

Earnings vs Market: ARCC's earnings (19.7% per year) are forecast to grow slower than the US market (20.2% per year).

High Growth Earnings: ARCC's earnings are forecast to grow, but not significantly.

Revenue vs Market: ARCC's revenue (3.9% per year) is forecast to grow slower than the US market (10.4% per year).

High Growth Revenue: ARCC's revenue (3.9% 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 (10.4%).

Past Performance

How has Ares Capital performed over the past 5 years?

-0.01%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ARCC has a large one-off loss of $292.0M impacting its December 31 2020 financial results.

Growing Profit Margin: ARCC's current net profit margins (32%) are lower than last year (51.3%).


Past Earnings Growth Analysis

Earnings Trend: ARCC's earnings have declined by 0.01% per year over the past 5 years.

Accelerating Growth: ARCC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ARCC had negative earnings growth (-38.3%) over the past year, making it difficult to compare to the Capital Markets industry average (9.9%).


Return on Equity

High ROE: ARCC's Return on Equity (6.7%) is considered low.

Financial Health

How is Ares Capital's financial position?


Financial Position Analysis

Short Term Liabilities: ARCC's short term assets ($549.0M) exceed its short term liabilities ($414.0M).

Long Term Liabilities: ARCC's short term assets ($549.0M) do not cover its long term liabilities ($8.6B).


Debt to Equity History and Analysis

Debt Level: ARCC's debt to equity ratio (119.4%) is considered high.

Reducing Debt: ARCC's debt to equity ratio has increased from 79.5% to 119.4% 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 (3.7x coverage).


Balance Sheet

Dividend

What is Ares Capital current dividend yield, its reliability and sustainability?

8.73%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: ARCC's dividend (8.73%) is higher than the bottom 25% of dividend payers in the US market (1.35%).

High Dividend: ARCC's dividend (8.73%) is in the top 25% of dividend payers in the US market (3.72%)


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 high payout ratio (140.2%), ARCC's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ARCC's dividends in 3 years are forecast to be covered by earnings (88.8% payout ratio).

Management

How experienced are the management team and are they aligned to shareholders interests?

6.6yrs

Average management tenure


CEO

Robert DeVeer (47 yo)

6.58yrs

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

NamePositionTenureCompensationOwnership
Michael Arougheti
Co-Chairman & Executive VP6.58yrsno data0.30%
$ 24.0m
Bennett Rosenthal
Co-Founder & Co-Chairman17.08yrsno datano data
Robert DeVeer
CEO & Director6.58yrsno data0.069%
$ 5.5m
Mitchell Goldstein
Co-President6.58yrsno data0.063%
$ 5.1m
Michael Smith
Co-President6.58yrsno data0.043%
$ 3.4m
Penelope Roll
Chief Financial Officer10.17yrsno data0.015%
$ 1.2m
Scott Lem
Chief Accounting Officer7.17yrsno datano data
John Stilmar
Managing Director of IRno datano datano data
Joshua Bloomstein
VP, General Counsel & Secretary11.08yrsno data0.0038%
$ 302.3k
Lisa Morgan
Chief Compliance Officer1.83yrsno datano data
Carl Drake
Partner/Head of Public Investor Relations & Communicationsno datano datano data
Mark Affolter
12.58yrsno datano data

6.6yrs

Average Tenure

48yo

Average Age

Experienced Management: ARCC's management team is seasoned and experienced (6.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Michael Arougheti
Co-Chairman & Executive VP6.58yrsno data0.30%
$ 24.0m
Bennett Rosenthal
Co-Founder & Co-Chairman17.08yrsno datano data
Robert DeVeer
CEO & Director6.58yrsno data0.069%
$ 5.5m
Robert Rosen
Director17.08yrsno data0.011%
$ 879.8k
Michael Parks
Independent Director1.25yrsUS$52.50k0.0049%
$ 388.7k
Eric Siegel
Lead Independent Director10.5yrsUS$294.50k0.012%
$ 971.0k
Daniel Kelly
Independent Director4.75yrsUS$253.50k0.0078%
$ 621.5k
H. Bartlett
Independent Director8.33yrsUS$249.50k0.0063%
$ 499.9k
Ann Bates
Independent Director10.83yrsUS$278.50k0.0073%
$ 586.3k
Steven McKeever
Independent Director8.42yrsUS$260.50k0.0079%
$ 628.7k

8.4yrs

Average Tenure

61yo

Average Age

Experienced Board: ARCC's board of directors are considered experienced (8.4 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 not been meaningfully diluted in the past year.


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$7.998b
  • Shares outstanding: 436.35m
  • Website: https://www.arescapitalcorp.com

Location

  • Ares Capital Corporation
  • 245 Park Avenue
  • 44th Floor
  • New York
  • New York
  • 10167
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ARCCNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDOct 2004
9A2DB (Deutsche Boerse AG)YesCommon StockDEEUROct 2004
0HHPLSE (London Stock Exchange)YesCommon StockGBUSDOct 2004

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 Analysis2021/02/26 23:52
End of Day Share Price2021/02/26 00:00
Earnings2020/12/31
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.