Reading the tape
NASDAQ: ARCC
Ares Capital Corporation
Financial Services · Asset Management
Market Cap
$13.41B
52w High
$23.42
52w Low
$17.40
P/E
11.66
Volume
6.18M
Outstanding Shares
718.02M
Price vs Fundamentals
Why The Stock Is Moving
Likely multiple compressionModerate confidence
1Y Price: -13.48%Revenue (TTM): 21.96%FCF (TTM): -62.27%P/FCF: 94th pct
What changed
The stock fell 13.48% over the last year. Revenue grew 21.96% over the trailing twelve months. Operating margin moved from 63.53% to 66.19%. Free cash flow declined 62.27% over the trailing twelve months.
What the market seems to be pricing
Visible fundamentals weakened far less than the stock price. The market appears to be discounting durability, risk, or trust rather than just the latest reported numbers.
What would invalidate this read
This read changes if operating margin (currently 66.19%) continues to decline, or if revenue growth turns negative. The bull case requires the business to hold its current trajectory.
Company profile
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.
CEOKort Schnabel
SectorFinancial Services
IndustryAsset Management
Employees1,200
IPO dateOct 5, 2004
Valuation
Forward P/E—
EV/EBITDA13.33
Enterprise value$29.21B
Price / Book0.94
Stock splits
No stock splits recorded for this ticker.
Profitability & growth
Standard profitability metrics can be misleading for financial/insurance companies. GAAP requires unrealized investment gains/losses in net income (affecting ROE), and margins are blended across diverse business segments.
Revenue growth71.08%
Gross margin70.82%▲4.87%vs FY2024
Operating margin66.19%▲3.39%vs FY2024
ROE9.07%▼20.39%vs FY2024
Analyst consensus
RatingBuy
Target price$21.88▲17.13%
25
Buy
7
Hold
0
Sell
Analyst ratings tend to be lagging indicators. Use as one signal among many.
Earnings
Full quarter-by-quarter history of actuals vs estimates. Switch into compare mode to inspect one metric year-over-year.
Next report
Jul 28, 2026
Q3 FY26 · EPS est $0.47 · Revenue est $770.31M
View
Dividends
$1.92/shareQuarterlyAt RiskARCC pays a dividend with a 10.28% declared yield, growing at 3.71% annually, covered -1.4× by free cash flow.
Declared Yield
10.28%
Annual Div / Share
$1.92
5yr CAGR
+3.71%
Doubles every ~19.0yr
Payout Ratio
113.13%
At Risk
Dividend Growth Rate
3yr CAGR
-0.17%
5yr CAGR
+3.71%
10yr CAGR
+2.36%
Dividend Safety
1/10At Risk
Dividend History
Annualized dividend cycles per share
YearAnnual DivYoY
2026$1.92+0.0%
2025$1.92+0.0%
2024$1.92-0.5%
2023$1.93+12.2%
2022$1.72+7.5%
2021$1.60-2.4%
2020$1.64+1.2%
Income Projection
Invest
$
Growth rate:
Reinvest dividends
Today
$103/yr
$9/mo
In 5 yrs
$123/yr+20%
$10/mo
In 10 yrs
$148/yr+44%
$12/mo
| Today | In 5 yrs | In 10 yrs |
|---|---|---|
$103/yr $9/mo | $123/yr+20% $10/mo | $148/yr+44% $12/mo |
Yield-on-cost grows from 10.28% → 14.8% over 10yr
Analysis
Dividend Strengths
No strong strength signal stands out from the latest period pair.
Risks to Watch
High payout ratio
With 113.13% of earnings paid as dividends, there is limited retained earnings for reinvestment — and a dividend cut becomes more likely if earnings decline.
Dividend exceeds free cash flow
Free cash flow covers only -1.36× the dividend. The company is paying out more than it generates in cash, which is unsustainable without borrowing or asset sales.