Ares Capital Corporation (ARCC) is a prominent publicly traded business development company that focuses on delivering tailored financing solutions to middle-market firms across diverse sectors. The company employs a dual investment strategy that integrates both debt and equity investments, aiming to achieve strong risk-adjusted returns while prioritizing capital preservation. Backed by the extensive expertise of Ares Management Corporation, ARCC's disciplined credit analysis and diversified investment portfolio position it to capitalize on growth opportunities and enhance long-term shareholder value in the evolving private equity landscape.
| Revenue (TTM) | $3.11B |
| Gross Profit (TTM) | $3.11B |
| EBITDA | — |
| Operating Margin | 75.60% |
| Return on Equity | 6.88% |
| Return on Assets | 4.94% |
| Revenue/Share (TTM) | $4.34 |
| Book Value | $19.35 |
| Price-to-Book | 0.99 |
| Price-to-Sales (TTM) | 4.44 |
| EV/Revenue | 25.15 |
| EV/EBITDA | 10.19 |
| Quarterly Earnings Growth (YoY) | -54.10% |
| Quarterly Revenue Growth (YoY) | 3.10% |
| Shares Outstanding | $718.02M |
| Float | 0 |
| % Insiders | 0.56% |
| % Institutions | 36.09% |
Volatility is currently expanding
The Federal Reserve just hiked rates for the first time in three years. It will likely continue to push them higher until inflation comes down.
Ares Capital (ARCC) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
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Ares Capital remains attractively valued at book value, offering a 9.7% dividend yield and trading at a 10.4x forward P/E. ARCC's portfolio is diversified, with mostly senior secured loans and limited single-borrower exposure, supporting portfolio resilience. Recent results show stable core EPS, healthy ROE, and improving lending terms, with wider spreads and higher upfront fees.
Weak M&A activity is constraining Ares Capital's deal flow. Management mentioned a pickup in transaction reviews in June, but this is a soft indicator and not as important as investment commitments. Net investment commitments declined in Q2, while backlog and pipeline have trended lower over the past 3 quarters. Rising non-accrual indicators, interest receivables, and portfolio-company leverage warrant closer credit monitoring.
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