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ARCC 
Ares Capital Corporation (ARCC)
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Upturn Advisory Summary
11/04/2025: ARCC (2-star) is currently NOT-A-BUY. Pass it for now.
Upturn Star Rating
Below Average Performance
These Stocks/ETFs, based on Upturn Advisory, often underperform the market, warranting careful consideration before investing.
Number of Analysts
13 Analysts rated it
Moderately tracked stock, growing coverage, gaining market and investor attention.
1 Year Target Price $22.75
1 Year Target Price $22.75
| 7 | Strong Buy |
| 4 | Buy |
| 2 | Hold |
| 0 | Sell |
| 0 | Strong Sell |
Analysis of Past Performance
Type Stock | Historic Profit 28.02% | Avg. Invested days 74 | Today’s Advisory PASS |
Upturn Star Rating | Upturn Advisory Performance  5.0 | Stock Returns Performance  3.0 |
| Profits based on simulation | Last Close 11/04/2025 |
Key Highlights
Company Size Large-Cap Stock | Market Capitalization 14.61B USD | Price to earnings Ratio 10.26 | 1Y Target Price 22.75 |
Price to earnings Ratio 10.26 | 1Y Target Price 22.75 | ||
Volume (30-day avg) 13 | Beta 0.72 | 52 Weeks Range 17.48 - 22.91 | Updated Date 11/3/2025 |
52 Weeks Range 17.48 - 22.91 | Updated Date 11/3/2025 | ||
Dividends yield (FY) 9.43% | Basic EPS (TTM) 1.99 |
Earnings Date
Report Date 2025-10-29 | When Before Market | Estimate 0.5 | Actual 0.5 |
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 10.26 | Forward PE 10.62 | Enterprise Value 29112979456 | Price to Sales(TTM) 4.84 |
Enterprise Value 29112979456 | Price to Sales(TTM) 4.84 | ||
Enterprise Value to Revenue 18.97 | Enterprise Value to EBITDA 10.19 | Shares Outstanding 715726600 | Shares Floating - |
Shares Outstanding 715726600 | Shares Floating - | ||
Percent Insiders 0.54 | Percent Institutions 32.74 |
Upturn AI SWOT
Ares Capital Corporation
Company Overview
History and Background
Ares Capital Corporation (ARCC) was founded in 2004 and is a leading specialty finance company that provides financing to U.S. middle market companies. It has grown through strategic investments and acquisitions to become one of the largest BDCs.
Core Business Areas
- Direct Lending: Primarily involves originating, structuring, and investing in first lien senior secured loans, second lien senior secured loans and mezzanine debt, which may include warrants or other equity participation rights.
- Asset Management: Generate income from fees earned for managing capital on behalf of third-party investors and managing ARCCs own investments.
Leadership and Structure
Kieran Goodwin serves as CEO. The company operates with a board of directors overseeing strategic direction and corporate governance.
Top Products and Market Share
Key Offerings
- Senior Secured Loans: These are typically first lien loans to middle-market companies. Ares competes with other BDCs, private credit funds, and banks. Market share data is difficult to precisely pinpoint, but ARCC is a major player, likely holding a significant portion of this market. Competitors include Main Street Capital and Prospect Capital.
- Subordinated Debt: Subordinated or mezzanine debt positions in middle-market companies. Again competition comes from same sources as above. Precise market share is unavailable. Competitors include Blackstone Private Credit Fund and Golub Capital BDC.
Market Dynamics
Industry Overview
The specialty finance industry is growing, driven by the increasing demand for private credit. Middle-market companies often seek alternatives to traditional bank loans. Interest rate fluctuations and economic conditions impact this market significantly.
Positioning
Ares Capital Corporation is a leading BDC known for its scale, experienced management team, and diversified portfolio. Its large asset base provides a competitive advantage in sourcing deals and managing risk.
Total Addressable Market (TAM)
The TAM for private credit to middle-market companies is estimated to be in the hundreds of billions of dollars. ARCC, with its substantial portfolio, is well-positioned to capture a significant portion of this TAM.
Upturn SWOT Analysis
Strengths
- Large Asset Base
- Experienced Management Team
- Diversified Investment Portfolio
- Strong Track Record of Generating Returns
Weaknesses
- Sensitivity to Interest Rate Changes
- Credit Risk Exposure
- Reliance on External Financing
- Regulatory Scrutiny
Opportunities
- Growing Demand for Private Credit
- Expansion into New Markets
- Strategic Acquisitions
- Increasing Investment in Technology
Threats
- Economic Downturn
- Increased Competition
- Rising Interest Rates
- Regulatory Changes
Competitors and Market Share
Key Competitors
- MAIN
- TCPC
- GHLD
Competitive Landscape
ARCC's large size and established reputation give it an advantage. However, smaller, more nimble competitors can sometimes offer more specialized financing solutions.
Major Acquisitions
American Capital
- Year: 2017
- Acquisition Price (USD millions): 3400
- Strategic Rationale: The acquisition of American Capital significantly increased ARCC's asset base and expanded its investment portfolio, enhancing its market position.
Growth Trajectory and Initiatives
Historical Growth: ARCC has grown significantly through strategic investments and acquisitions, expanding its portfolio and asset base.
Future Projections: Analyst projections vary, but generally anticipate continued growth driven by private credit demand and strategic initiatives. Consult financial news and analyst reports for specific forecasts.
Recent Initiatives: Recent initiatives include increasing investment in certain sectors, enhancing portfolio diversification, and optimizing capital structure.
Summary
Ares Capital Corporation is a strong player in the BDC space, benefitting from a large asset base and experienced management. Its diversified portfolio helps mitigate risk, but it faces challenges from interest rate sensitivity and competition. Its dividend history and strategic acquisitions support shareholder value. Continued growth depends on navigating economic conditions and capitalizing on opportunities in the private credit market.
Similar Stocks
Sources and Disclaimers
Data Sources:
- Ares Capital Corporation Investor Relations
- SEC Filings
- Yahoo Finance
- Google Finance
Disclaimers:
This analysis is for informational purposes only and should not be considered financial advice. Market data and analyst estimates are subject to change. Consult with a qualified financial advisor before making any investment decisions.
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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