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ARCC 
Ares Capital Corporation (ARCC)
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Upturn Advisory Summary
01/09/2026: ARCC (3-star) is a STRONG-BUY. BUY since 24 days. Simulated Profits (0.49%). Updated daily EoD!
Upturn Star Rating
Moderate Performance
These Stocks/ETFs, based on Upturn Advisory, typically align with the market average, offering steady but unremarkable returns.
Number of Analysts
13 Analysts rated it
Moderately tracked stock, growing coverage, gaining market and investor attention.
1 Year Target Price $22.64
1 Year Target Price $22.64
| 7 | Strong Buy |
| 4 | Buy |
| 2 | Hold |
| 0 | Sell |
| 0 | Strong Sell |
Analysis of Past Performance
Type Stock | Historic Profit 28.71% | Avg. Invested days 66 | Today’s Advisory Strong Buy |
Upturn Star Rating | Upturn Advisory Performance  5.0 | Stock Returns Performance  3.0 |
| Profits based on simulation | Last Close 01/09/2026 |
Key Highlights
Company Size Large-Cap Stock | Market Capitalization 14.87B USD | Price to earnings Ratio 10.44 | 1Y Target Price 22.64 |
Price to earnings Ratio 10.44 | 1Y Target Price 22.64 | ||
Volume (30-day avg) 13 | Beta 0.62 | 52 Weeks Range 17.08 - 22.38 | Updated Date 01/8/2026 |
52 Weeks Range 17.08 - 22.38 | Updated Date 01/8/2026 | ||
Dividends yield (FY) 9.51% | Basic EPS (TTM) 1.99 |
Earnings Date
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin 45.16% | Operating Margin (TTM) 71.36% |
Management Effectiveness
Return on Assets (TTM) 4.78% | Return on Equity (TTM) 10.06% |
Valuation
Trailing PE 10.44 | Forward PE 10.55 | Enterprise Value 29377798144 | Price to Sales(TTM) 4.93 |
Enterprise Value 29377798144 | Price to Sales(TTM) 4.93 | ||
Enterprise Value to Revenue 19.11 | Enterprise Value to EBITDA 10.19 | Shares Outstanding 715726600 | Shares Floating - |
Shares Outstanding 715726600 | Shares Floating - | ||
Percent Insiders 0.55 | Percent Institutions 33.52 |
Upturn AI SWOT
Ares Capital Corporation
Company Overview
History and Background
Ares Capital Corporation (ARCC) was founded in 2004 and is a leading publicly traded specialty finance company. It is a leading provider of flexible, tailored financing solutions to the United States middle market. ARCC has grown significantly through organic growth and strategic acquisitions, expanding its investment capabilities and geographic reach.
Core Business Areas
- Direct Lending: ARCC provides a broad range of financing solutions to middle-market companies, including senior debt, unitranche facilities, subordinated debt, and mezzanine capital. They focus on businesses with strong fundamentals and attractive growth prospects.
- Equity Investments: In addition to debt financing, ARCC also makes equity investments in some of its portfolio companies, seeking to benefit from their long-term growth and value appreciation.
- Syndication and Origination: ARCC leverages its extensive network and expertise to originate and syndicate loans, often participating in larger financing rounds alongside other lenders.
Leadership and Structure
Ares Capital Corporation is managed by Ares Management Corporation, a global alternative investment manager. The company is led by a team of experienced investment professionals with deep expertise in credit and capital markets. It operates as a Business Development Company (BDC).
Top Products and Market Share
Key Offerings
- Description: These are the primary debt instruments ARCC offers, ranking first in priority of payment and secured by the borrower's assets. This is a core product in the middle-market direct lending space.
- Market Share: As a leading BDC, ARCC holds a significant position in the direct lending market, though specific market share data for this product segment is complex to isolate due to the diverse nature of the market. Competitors include other BDCs, private credit funds, and traditional banks.
- Product Name 1: Senior Secured Loans
- Description: A combination of senior and subordinated debt in a single facility, simplifying the capital structure for borrowers. This is increasingly popular in the middle market.
- Market Share: A growing segment where ARCC is a key player. Competitors include other large BDCs and specialized private credit funds.
- Product Name 2: Unitranche Facilities
- Description: Subordinated debt that ranks below senior debt but above equity, often with equity kickers. This is a higher-risk, higher-return product.
- Market Share: A niche within direct lending where ARCC competes with other specialized funds. Competitors include other BDCs and private equity firms with credit arms.
- Product Name 3: Mezzanine Debt
Market Dynamics
Industry Overview
The middle-market lending industry is characterized by a growing demand for flexible financing solutions, driven by the need for growth capital, acquisitions, and refinancing among private companies. The sector is competitive, with a mix of BDCs, private credit funds, and traditional lenders.
Positioning
Ares Capital Corporation is a well-established leader in the middle-market direct lending space. Its competitive advantages include its scale, deep relationships with sponsors and intermediaries, experienced management team, and ability to provide flexible and customized financing solutions. It benefits from a diversified portfolio across various industries.
Total Addressable Market (TAM)
The total addressable market for middle-market direct lending is substantial and estimated to be in the hundreds of billions of dollars, driven by the vast number of middle-market companies in the U.S. Ares Capital Corporation is a significant player within this TAM, with a large and growing portfolio. However, the TAM is dynamic and influenced by economic conditions and regulatory environments.
Upturn SWOT Analysis
Strengths
- Strong and experienced management team with a proven track record.
- Significant scale and market presence in direct lending.
- Diversified portfolio across industries and borrowers.
- Access to capital through Ares Management's platform.
- Ability to provide flexible and customized financing solutions.
Weaknesses
- Exposure to interest rate risk due to floating-rate assets.
- Reliance on economic conditions affecting middle-market companies.
- Potential for credit losses in its loan portfolio.
- BDC structure can lead to complexity in financial reporting.
Opportunities
- Continued growth in the middle-market direct lending space.
- Opportunities for add-on acquisitions and strategic investments.
- Expansion into new investment strategies or geographies.
- Leveraging technology to improve operational efficiency and deal sourcing.
Threats
- Increased competition from other BDCs and private credit funds.
- Potential economic downturns or recessions impacting borrower performance.
- Rising interest rates increasing the cost of borrowing for ARCC.
- Regulatory changes affecting BDCs or the lending industry.
Competitors and Market Share
Key Competitors
- Blackstone Private Credit Fund (BCRED)
- Apollo Senior Floating Rate Fund Inc. (SRF)
- Hercules Capital, Inc. (HTGC)
- Owl Rock Capital Corporation (ORCC)
Competitive Landscape
ARCC's advantages include its established reputation, scale, and deep sponsor relationships. Its disadvantages might stem from its size, potentially making it less agile than smaller niche funds in certain situations. Competitors often focus on specific sectors or deal sizes, offering specialized expertise that ARCC may not always match across its broad portfolio.
Major Acquisitions
New Mountain Finance Corporation (NMFC) (proposed, later terminated)
- Year: 2023
- Acquisition Price (USD millions):
- Strategic Rationale: To significantly expand ARCC's scale and diversify its investment portfolio, creating a more robust and larger BDC with enhanced investment capabilities.
Golub Capital BDC, Inc. (GCBD) (proposed, later terminated)
- Year: 2022
- Acquisition Price (USD millions):
- Strategic Rationale: To combine two leading BDCs, creating a larger, more diversified entity with significant scale and enhanced operational efficiencies.
Growth Trajectory and Initiatives
Historical Growth: ARCC has experienced substantial historical growth in its total assets, investment portfolio, and net investment income. This growth has been fueled by organic origination, strategic acquisitions of smaller BDCs, and strong market demand for its lending products.
Future Projections: Analyst estimates generally project continued growth for ARCC, driven by ongoing expansion of its direct lending platform, potential for strategic acquisitions, and favorable market conditions for middle-market financing. Projections often focus on growth in NII and dividend sustainability.
Recent Initiatives: Recent initiatives likely include expanding its origination capabilities, investing in new sectors or specialized strategies, and potentially further consolidating the BDC market through strategic acquisitions. Focus on technology and operational efficiency is also probable.
Summary
Ares Capital Corporation is a dominant player in the middle-market direct lending sector, benefiting from its scale, experienced management, and diversified portfolio. Its consistent dividend payouts and historical growth trajectory make it attractive to income-focused investors. However, the company is exposed to interest rate fluctuations and increased competition, requiring vigilant risk management and strategic adaptation to maintain its strong market position.
Similar Stocks
Sources and Disclaimers
Data Sources:
- Ares Capital Corporation Investor Relations
- SEC Filings (10-K, 10-Q)
- Industry Research Reports
- Financial News Outlets
Disclaimers:
This JSON output is generated based on publicly available information and is intended for informational purposes only. It does not constitute financial advice. Market share data is an estimation based on industry leadership and available reports. Specific financial figures and acquisition details may vary and should be verified with the latest official company filings.
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
About Ares Capital Corporation
Exchange NASDAQ | Headquaters Los Angeles, CA, United States | ||
IPO Launch date 2004-10-06 | CEO, Partner & Co-Head of U.S. Direct Lending Mr. Kort Schnabel | ||
Sector Financial Services | Industry Asset Management | Full time employees - | Website https://www.arescapitalcorp.com |
Full time employees - | Website https://www.arescapitalcorp.com | ||
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 invest in the United States based companies. 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.
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