Ares Capital Corporation (ARCC) AI Stock Analysis

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 provides growth capital and general refinancing. The fund invests across industries such as manufacturing, business services, consumer products, health care, and information technology services, as well as restaurants, retail, and energy. It typically invests between $20 million and $200 million, with a maximum of $400 million, in companies with an EBITDA between $10 million and $250 million. It deploys capital through revolvers, first lien loans, unitranche structures, second lien loans, mezzanine debt, and equity.

Between FY2020 and FY2025, Ares Capital delivered a 5-year revenue CAGR of 32.9%. Revenue reached $2.37B in FY2024 before decreasing 5.3% to $2.24B in FY2025, when net income totaled $1.30B with a 57.9% net margin. Operating margin was 62.4% in FY2025 and stood at 75.6% over the trailing twelve months. Trailing twelve months revenue reached $3.11B with diluted EPS of $1.34. In the latest quarter ended June 30, 2026, revenue increased 3.1% year-over-year, while quarterly earnings declined 54.1%.

As of June 30, 2026, Ares Capital held $383.0M in cash and short-term investments against $15.77B in total debt, resulting in net debt of $15.39B. Total assets stood at $30.50B and shareholders' equity was $13.89B, with a debt-to-equity ratio of 1.14 and a current ratio of 1.14. Free cash flow was $1.14B in FY2025, identical to operating cash flow. In FY2025, the company paid $1.26B in dividends, while its share count expanded 55.1% over the prior five years.

Ares Capital trades at a trailing P/E of 14.0x, above the 12.1x median of its US-listed Financial Services peers. Its forward P/E is 10.0x compared to the peer median of 10.8x, and its price-to-sales ratio of 4.3x compares to the peer median of 3.2x. The enterprise value stands at $28.90B with an EV/EBITDA multiple of 10.2x, below the peer group median of 11.7x. Over the past year, the stock returned 5.9%, trailing the S&P 500 (SPY) return of 16.8%, while its 5-year return of 43.5% also lagged the index's 83.0% gain.

Ares Capital pays a quarterly dividend with a forward annual rate of $1.92, representing a dividend yield of 10.26%. The payout ratio is 99.0%. The company has paid dividends for 23 consecutive years and posted an annualized 5-year dividend growth rate of 3.7%. Its most recent ex-dividend date was September 15, 2026.

Wall Street coverage includes 7 Strong Buy, 4 Buy, and 3 Hold ratings, with no Sell or Strong Sell recommendations. The mean price target is $20.77, representing a 10.9% upside from the last close of $18.72. For the fiscal year ending December 31, 2026, consensus estimates project revenue of $3.09B and EPS of $1.91, a 5.1% decline. Ares Capital exceeded EPS estimates in 1 of the last 4 quarters, with its next earnings date scheduled for October 27, 2026.

This page is an AI-written research summary of Ares Capital Corporation (ARCC). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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