ARCC

Ares Capital Corporation

Fundamental data last updated:June 5, 2026

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company profile

SECTOR

Financial Services

industry

Asset Management

Exchange

NASDAQ

County of HQ

US

Next Earnings Date

07/28/2026

Business 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. 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.

 


VALUATION

P/E

11.94

Market Cap ($M USD)

$13.73B

Forward P/E

10.23

PEG

0.61

PRICE TO SALES

5.22

PRICE TO BOOK

0.98

EV / EBITDA

14.20

5-Year Average P/E

Free Cash Flow Yield

7.82%

DCF Value

$169.38

Graham Number

$26.57

Price to FCF

12.79

EV to FCF

27.07

Earnings Yield

8.37%

FCF Yield

7.82%

DIVIDEND

Yield

10.04%

Annual Payout

$1.92

Payout Ratio

113.13%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

$1.60

Next Year EPS Growth Estimate

$1.87

Next Year Revenue Growth Estimate

$308.28B

Return on Equity (ROE)

8.11%

FREE CASH FLOW

Operating Margin

66.19%

Debt-to-Equity

1.12

Piotroski F-Score

5

Altman Z-Score

0.82

Return on Invested Capital (ROIC)

5.79%

Current Ratio

0.87

Quick Ratio

0.87

Net Debt to EBITDA

7.49

Interest Coverage

2.54

Gross Profit margin

70.82%

FCF PER SHARE

$1.50

REVENUE PER SHARE

$3.67

Gainseekers Quantitative Analysis

Summary

The market seems to be overlooking Ares Capital Corporation’s intrinsic value. Despite a snapshot price trading well below its DCF value of $176.07 and Graham Number of $26.57, the stock’s Forward P/E of 10.23 suggests a bargain for growth investors. However, the Altman Z-score of 0.83 raises red flags about financial distress, indicating potential risk. The Earnings Yield of 8.43% is attractive, yet the high payout ratio of 113.13% questions dividend sustainability. Overall, the valuation appears compelling, but caution is warranted given the financial health indicators.

AI Exposure / Tech Reliance

In the asset management industry, Ares Capital Corporation is well-positioned to leverage AI and tech advancements to optimize portfolio management and risk assessment. Its focus on financial services allows for the integration of AI-driven analytics to enhance decision-making. However, the company's adaptability will depend on its ability to invest in and implement these technologies effectively.

The Bull Case

For value or GARP investors, Ares Capital Corporation presents a compelling opportunity. The ROIC of 5.79% and a robust operating margin of 66.19% highlight efficient capital use and strong pricing power. A Piotroski F-Score of 5 indicates moderate financial strength, while the FCF Yield of 3.44% suggests potential for cash flow growth. These metrics paint a picture of a company with solid fundamentals and the ability to generate consistent returns.

The Bear Case

Despite its strengths, Ares Capital Corporation faces significant structural risks. The Altman Z-score of 0.83 signals potential financial distress, and the Net Debt to EBITDA ratio of 7.49 raises concerns about leverage. Additionally, the Price to FCF ratio of 29.10 suggests the stock may be overvalued relative to its cash flow generation. The high EV to FCF of 61.82 further underscores the cash flow challenges, making it a risky bet for cautious investors.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Buy

Average Analyst Price Target

$21.88

Institutional Ownership %

1-Year Beta

0.63

Insider Buying % (6 Mo)

Distance to 52-Week High

22.46%

Distance to 52-Week Low

9.02%

EARNINGS SURPRISE %

-2.08%

50-DAY SMA

$18.57

200-DAY SMA

$19.93

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.