ARDC

Ares Dynamic Credit Allocation Fund, Inc.

Fundamental data last updated:June 4, 2026

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company profile

SECTOR

Financial Services

industry

Asset Management

Exchange

NYSE

County of HQ

US

Next Earnings Date

Not Scheduled

Business Summary

Ares Dynamic Credit Allocation Fund, Inc. is a closed-ended fixed income mutual fund launched by Ares Management LLC. The fund is managed by Ares Capital Management II LLC. It invests in the fixed income markets of Europe. The fund primarily invests in debt instruments such as senior loans made primarily to companies whose debt is rated below investment grade, corporate bonds that are primarily high yield issues rated below investment grade, debt securities issued by CLOs, and other fixed-income instruments. It focuses on such factors as the overall macroeconomic environment, financial markets, and company specific research and analysis, to create its portfolio. Ares Dynamic Credit Allocation Fund, Inc. was formed on November 27, 2012 and is domiciled in the United States.

 


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VALUATION

P/E

13.67

Market Cap ($M USD)

$305.81M

Forward P/E

N/A

PEG

N/A

PRICE TO SALES

6.74

PRICE TO BOOK

0.89

EV / EBITDA

15.59

5-Year Average P/E

Free Cash Flow Yield

7.05%

DCF Value

$15.44

Graham Number

$17.35

Price to FCF

14.19

EV to FCF

24.18

Earnings Yield

7.32%

FCF Yield

7.05%

DIVIDEND

Yield

10.58%

Annual Payout

$1.35

Payout Ratio

143.21%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

$0.93

Next Year EPS Growth Estimate

N/A

Next Year Revenue Growth Estimate

N/A

Return on Equity (ROE)

6.47%

FREE CASH FLOW

Operating Margin

73.78%

Debt-to-Equity

0.65

Piotroski F-Score

5

Altman Z-Score

1.47

Return on Invested Capital (ROIC)

5.73%

Current Ratio

0.00

Quick Ratio

0.00

Net Debt to EBITDA

6.44

Interest Coverage

7.10

Gross Profit margin

46.50%

FCF PER SHARE

$0.90

REVENUE PER SHARE

$1.89

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Gainseekers Quantitative Analysis

Summary

The market seems to be undervaluing ARDC, trading below its DCF value and Graham Number, suggesting a potential opportunity for value investors. With a Price/Book ratio under 1, the stock appears cheap relative to its assets. However, the Altman Z-score of 1.48 raises red flags about financial distress, indicating potential risks. The Earnings Yield of 7.25% is attractive, but the lack of a Forward P/E suggests uncertainty in future earnings. Overall, while there are signs of value, caution is warranted due to financial stability concerns.

AI Exposure / Tech Reliance

As an asset management firm, ARDC operates in a sector that is increasingly leveraging AI for data analysis and investment strategies. However, the company's traditional focus may limit its agility in adopting cutting-edge tech compared to more tech-savvy competitors. Its resilience will depend on how effectively it integrates AI into its existing frameworks.

The Bull Case

For the value-driven investor, ARDC offers compelling reasons to buy. The robust operating margin of 73.78% indicates strong pricing power and efficient management. A Piotroski F-Score of 5 suggests moderate financial health, while a solid ROIC of 5.73% reflects effective capital allocation. The FCF Yield, although modest, indicates some level of cash generation, making it an attractive proposition for those seeking stable returns in a volatile market.

The Bear Case

Despite some strengths, ARDC faces significant structural risks. The high payout ratio of 143.21% is unsustainable, raising concerns about future dividend cuts. Its Net Debt to EBITDA ratio of 6.44 indicates heavy leverage, which could be problematic in a rising interest rate environment. Additionally, trading at an EV to EBITDA of 15.68 suggests the stock is not cheap, especially given its limited growth prospects. These factors make it a risky bet for conservative investors.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

N/A

Average Analyst Price Target

N/A

Institutional Ownership %

1-Year Beta

0.60

Insider Buying % (6 Mo)

Distance to 52-Week High

17.79%

Distance to 52-Week Low

9.09%

EARNINGS SURPRISE %

N/A

50-DAY SMA

$12.45

200-DAY SMA

$13.34

⚠️ 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.