Ares Capital
Market Cap
US$4.1b
Last Updated
2020/04/03 06:51 UTC
Data Sources
Company Financials +
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.
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's share price has been volatile over the past 3 months.
Market Performance
7 Day Return
-14.5%
ARCC
-4.5%
US Capital Markets
-4.1%
US Market
1 Year Return
-44.7%
ARCC
-15.6%
US Capital Markets
-14.9%
US Market
Return vs Industry: ARCC underperformed the US Capital Markets industry which returned -15.6% over the past year.
Return vs Market: ARCC underperformed the US Market which returned -14.9% over the past year.
Shareholder returns
| ARCC | Industry | Market | |
|---|---|---|---|
| 7 Day | -14.5% | -4.5% | -4.1% |
| 30 Day | -46.5% | -21.1% | -19.1% |
| 90 Day | -48.3% | -25.9% | -23.4% |
| 1 Year | -39.1%-44.7% | -13.9%-15.6% | -13.2%-14.9% |
| 3 Year | -27.1%-45.1% | 5.1%-1.0% | 10.7%3.5% |
| 5 Year | -8.9%-43.7% | 29.0%16.9% | 28.5%14.5% |
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
2 years ago | Simply Wall St
Read This Before Buying Ares Capital Corporation (ARCC) For Its Upcoming $0.38 Dividend2 years ago | Simply Wall St
What Do Analysts Think About Ares Capital Corporation's (ARCC) Future?2 years ago | Simply Wall St
Ares Capital Corporation (ARCC): What Does The Future Look Like?Valuation
Is Ares Capital undervalued compared to its fair value and its price relative to the market?
>50%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: ARCC ($9.65) is trading below our estimate of fair value ($23.43)
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 (5.2x) compared to the Capital Markets industry average (33x).
PE vs Market: ARCC is good value based on its PE Ratio (5.2x) compared to the US market (12.5x).
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 (0.6x) compared to the US Capital Markets industry average (7.7x).
Future Growth
How is Ares Capital forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?
-0.6%
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 (-0.6% per year).
Earnings vs Market: ARCC's earnings are forecast to decline over the next 3 years (-0.6% per year).
High Growth Earnings: ARCC's earnings are forecast to decline over the next 3 years.
Revenue vs Market: ARCC's revenue (2.5% per year) is forecast to grow slower than the US market (7.1% per year).
High Growth Revenue: ARCC's revenue (2.5% 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 (10.8%).
Past Performance
How has Ares Capital performed over the past 5 years?
13.5%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: ARCC has high quality earnings.
Growing Profit Margin: ARCC's current net profit margins (51.9%) are lower than last year (64.2%).
Past Earnings Growth Analysis
Earnings Trend: ARCC's earnings have grown by 13.5% 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 (-7.6%) over the past year, making it difficult to compare to the Capital Markets industry average (9.7%).
Return on Equity
High ROE: ARCC's Return on Equity (10.6%) is considered low.
Financial Health
How is Ares Capital's financial position? (This company is analysed differently as a bank or financial institution)
Financial Position Analysis
Debt to Equity History and Analysis
Balance Sheet
Inventory Level: ARCC has a low level of unsold assets or inventory.
Debt Coverage by Assets: ARCC's debt is not covered by short term assets (assets are 0x debt).
Financial Institutions Analysis
Asset Level: ARCC's level of assets compared to its equity is low.
Allowance for Bad Loans: Insufficient data to determine if ARCC has a sufficient allowance for bad loans.
Low Risk Liabilities: ARCC reports no customer deposits, loans are made up entirely of externally borrowed funds.
Loan Level: Insufficient data to determine if ARCC has an acceptable proportion of non-loan assets held.
Low Risk Deposits: ARCC has advanced significantly more loans than the customer deposits it holds.
Level of Bad Loans: Insufficient data to determine if ARCC has an appropriate level of bad loans.
Dividend
What is Ares Capital's current dividend yield, its reliability and sustainability?
16.58%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: ARCC's dividend (16.58%) is higher than the bottom 25% of dividend payers in the US market (2.04%).
High Dividend: ARCC's dividend (16.58%) is in the top 25% of dividend payers in the US market (5.7%)
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: At its current payout ratio (86.2%), ARCC's payments are covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: ARCC's dividends in 3 years are not forecast to be well covered by earnings (91.9% payout ratio).
Management
How experienced are the management team and are they aligned to shareholders interests?
6.0yrs
Average management tenure
CEO
Robert DeVeer (46yo)
5.75s
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
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Co-Chairman & Executive VP | 5.75yrs | no data | 0.28% $11.4m | |
| Co-Founder | 16.25yrs | no data | no data | |
| CEO & Director | 5.75yrs | no data | 0.053% $2.2m | |
| Co-President | 5.75yrs | no data | 0.063% $2.6m | |
| Co-President | 5.75yrs | no data | 0.036% $1.5m | |
| Chief Financial Officer | 9.33yrs | no data | 0.017% $679.7k | |
| Chief Accounting Officer | 6.33yrs | no data | no data | |
| Managing Director of IR | no data | no data | no data | |
| VP, General Counsel & Secretary | 10.25yrs | no data | no data | |
| Chief Compliance Officer | 8.75yrs | no data | no data |
6.0yrs
Average Tenure
47yo
Average Age
Experienced Management: ARCC's management team is seasoned and experienced (6 years average tenure).
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Co-Chairman & Executive VP | 5.75yrs | no data | 0.28% $11.4m | |
| Co-Founder | 16.25yrs | no data | no data | |
| CEO & Director | 5.75yrs | no data | 0.053% $2.2m | |
| Director | 16.25yrs | no data | 0.0089% $364.3k | |
| Independent Class II Director | 0.42yr | no data | 0.0010% $41.8k | |
| Lead Independent Director | 9.67yrs | US$242.00k | 0.012% $493.5k | |
| Independent Director | 3.92yrs | US$221.00k | 0.0075% $307.7k | |
| Independent Director | 7.5yrs | US$221.00k | 0.0064% $263.4k | |
| Independent Director | 10yrs | US$231.50k | 0.0075% $308.9k | |
| Independent Director | 7.58yrs | US$223.00k | 0.0080% $329.0k |
7.5yrs
Average Tenure
60yo
Average Age
Experienced Board: ARCC's board of directors are considered experienced (7.5 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: ARCC 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$4.102b
- Shares outstanding: 425.09m
- Website: https://www.arescapitalcorp.com
Location
- Ares Capital Corporation
- 245 Park Avenue
- 44th Floor
- New York
- New York
- 10167
- United States
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| ARCC | NasdaqGS (Nasdaq Global Select) | Yes | Common Stock | US | USD | Oct 2004 |
| 9A2 | DB (Deutsche Boerse AG) | Yes | Common Stock | DE | EUR | Oct 2004 |
| 0HHP | LSE (London Stock Exchange) | Yes | Common Stock | GB | USD | Oct 2004 |
| 9A2 | BRSE (Berne Stock Exchange) | Yes | Common Stock | CH | CHF | Oct 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 market companies. It also makes growth capital and general refinancing. It prefers to make investments in companies engaged in the basic and growth manufacturing, business services, consumer products, health care products and services, and information technology service sectors. The fund will also consider investments in industries such as restaurants, retail, oil and gas, and technology sectors. It focuses on investments in Northeast, Mid-Atlantic, Southeast and Southwest regions from its New York office, the Midwest region, from the Chicago office, and the Western region from the Los Angeles office. The fund typically invests between $20 million and $200 million and a maximum of $400 million in companies with an EBITDA between $10 million and $250 million. It makes debt investments between $10 million and $100 million The fund invests through revolvers, first lien loans, warrants, unitranche structures, second lien loans, mezzanine debt, private high yield, junior capital, subordinated debt, and non-control preferred and common equity. The fund also selectively considers third-party-led senior and subordinated debt financings and opportunistically considers the purchase of stressed and discounted debt positions. The fund prefers to be an agent and/or lead the transactions in which it invests. The fund also seeks board representation in its portfolio companies.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/04/03 06:51 |
| End of Day Share Price | 2020/04/02 00:00 |
| Earnings | 2019/12/31 |
| Annual Earnings | 2019/12/31 |
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.