NYSE:ARES

Stock Analysis Report

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Executive Summary

Ares Management Corporation operates as an alternative asset manager in the United States, Europe, and Asia. More Details


Snowflake Analysis

High growth potential unattractive dividend payer.


Similar Companies

Share Price & News

How has Ares Management's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ARES is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: ARES's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

-0.04%

ARES

-0.5%

US Capital Markets

1.5%

US Market


1 Year Return

20.7%

ARES

16.2%

US Capital Markets

22.8%

US Market

Return vs Industry: ARES exceeded the US Capital Markets industry which returned 16.2% over the past year.

Return vs Market: ARES underperformed the US Market which returned 22.8% over the past year.


Shareholder returns

ARESIndustryMarket
7 Day-0.04%-0.5%1.5%
30 Day-7.0%7.5%5.0%
90 Day2.1%22.3%15.2%
1 Year25.8%20.7%19.2%16.2%25.6%22.8%
3 Year116.5%86.8%29.9%19.9%47.3%37.5%
5 Year410.5%292.5%149.5%118.4%133.4%107.3%

Long-Term Price Volatility Vs. Market

How volatile is Ares Management's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

73.12x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ARES ($45.76) is trading above our estimate of fair value ($11.24)

Significantly Below Fair Value: ARES is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ARES is poor value based on its PE Ratio (73.1x) compared to the US Capital Markets industry average (27.5x).

PE vs Market: ARES is poor value based on its PE Ratio (73.1x) compared to the US market (21.1x).


Price to Earnings Growth Ratio

PEG Ratio: ARES is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: ARES is overvalued based on its PB Ratio (7.8x) compared to the US Capital Markets industry average (5.1x).


Next Steps

Future Growth

How is Ares Management forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

44.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARES's forecast earnings growth (44.3% per year) is above the savings rate (2%).

Earnings vs Market: ARES's earnings (44.3% per year) are forecast to grow faster than the US market (21.6% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ARES's revenue (19.5% per year) is forecast to grow faster than the US market (10.5% per year).

High Growth Revenue: ARES's revenue (19.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ARES's Return on Equity is forecast to be very high in 3 years time (54.3%).


Next Steps

Past Performance

How has Ares Management performed over the past 5 years?

17.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ARES has a large one-off loss of $149.0M impacting its September 30 2020 financial results.

Growing Profit Margin: ARES's current net profit margins (5.2%) are lower than last year (6%).


Past Earnings Growth Analysis

Earnings Trend: ARES's earnings have grown by 17.1% per year over the past 5 years.

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

Earnings vs Industry: ARES had negative earnings growth (-15%) over the past year, making it difficult to compare to the Capital Markets industry average (4.9%).


Return on Equity

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


Next Steps

  • Explore strong past performing companies in the Diversified Financials industry.

Financial Health

How is Ares Management's financial position?


Financial Position Analysis

Short Term Liabilities: ARES's short term assets ($1.8B) do not cover its short term liabilities ($2.0B).

Long Term Liabilities: ARES's short term assets ($1.8B) do not cover its long term liabilities ($10.5B).


Debt to Equity History and Analysis

Debt Level: ARES's debt to equity ratio (421.5%) is considered high.

Reducing Debt: ARES's debt to equity ratio has increased from 291.8% to 421.5% over the past 5 years.

Debt Coverage: ARES's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: ARES earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

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

3.50%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ARES's dividend (3.5%) is higher than the bottom 25% of dividend payers in the US market (1.37%).

High Dividend: ARES's dividend (3.5%) is low compared to the top 25% of dividend payers in the US market (3.86%).


Stability and Growth of Payments

Stable Dividend: ARES has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: ARES's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (242.9%), ARES's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ARES's dividends in 3 years are forecast to be covered by earnings (82.1% payout ratio).


Next Steps

Management

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

2.0yrs

Average management tenure


CEO

Mike Arougheti (48 yo)

no data

Tenure

US$12,665,722

Compensation

Mr. Michael J. Arougheti, also known as Mike, is a Director, Co-Founder, Chief Executive Officer, and President of Ares Management LLC. Mr. Arougheti is Co-Founder, Chief Executive Officer and President of...


Leadership Team

NamePositionTenureCompensationOwnership
Antony Ressler
Co-founder & Executive Chairmanno dataUS$31.46mno data
Michael Arougheti
Co-Founderno dataUS$12.67m0.061%
$ 7.3m
David Kaplan
Director6.83yrsUS$30.93m0%
$ 0
Bennett Rosenthal
Co-Founder6.83yrsUS$30.93m0.28%
$ 33.4m
Michael McFerran
Partner5.83yrsUS$7.03m0.042%
$ 5.0m
Jarrod Phillips
Partner of Finance1.75yrsno datano data
Sandesh Hegde
Partner2yrsno datano data
Carl Drake
Partner and Head of Public Investor Relations & Communicationsno datano datano data
Naseem Sagati Aghili
Secretary1yrno data0.017%
$ 2.0m
Miriam Krieger
Partner & Global Chief Compliance Officerno datano datano data
Ryan Berry
Partner and Chief Marketing & Strategy Officer3yrsno data0.10%
$ 12.2m
Jessica Dosen
Partner & Global Head of Human Resourcesno datano datano data

2.0yrs

Average Tenure

48yo

Average Age

Experienced Management: ARES's management team is considered experienced (2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Antony Ressler
Co-founder & Executive Chairmanno dataUS$31.46mno data
Michael Arougheti
Co-Founderno dataUS$12.67m0.061%
$ 7.3m
David Kaplan
Director6.83yrsUS$30.93m0%
$ 0
Bennett Rosenthal
Co-Founder6.83yrsUS$30.93m0.28%
$ 33.4m
Robert DeVeer
Partner0.92yrno data0.11%
$ 13.2m
Michael Lynton
Independent Director6.67yrsUS$179.24k0.0098%
$ 1.2m
Antoinette Cook Bush
Independent Director2yrsUS$175.08k0.0016%
$ 189.6k
Paul Joubert
Independent Director6.67yrsUS$194.24k0.017%
$ 2.0m
Judy Olian
Independent Director6.67yrsUS$179.24k0.011%
$ 1.3m

6.7yrs

Average Tenure

59yo

Average Age

Experienced Board: ARES's board of directors are considered experienced (6.7 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 11.7%.


Top Shareholders

Company Information

Ares Management Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Ares Management Corporation
  • Ticker: ARES
  • Exchange: NYSE
  • Founded: 1997
  • Industry: Asset Management and Custody Banks
  • Sector: Diversified Financials
  • Implied Market Cap: US$11.997b
  • Market Cap: US$6.582b
  • Shares outstanding: 258.45m
  • Website: https://www.aresmgmt.com

Number of Employees


Location

  • Ares Management Corporation
  • 2000 Avenue of the Stars
  • 12th Floor
  • Los Angeles
  • California
  • 90067
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ARESNYSE (New York Stock Exchange)YesClass A Common StockUSUSDMay 2014
ARES.PRANYSE (New York Stock Exchange)7% SER A PFD STKUSUSDJun 2016

Biography

Ares Management Corporation operates as an alternative asset manager in the United States, Europe, and Asia. The company’s Tradable Credit Group segment manages various types of investment funds, such as c...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/01/21 23:18
End of Day Share Price2021/01/21 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


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.