Ares Capital Corporation (ARCC) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

+180.1%

$54.39

vs $19.42 price

Levered DCF

$40.69

After debt service

Piotroski score

7 / 9

Strong

Altman Z-score

0.8

Distress zone

Rating

B+

Overall 3 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	10.88×	8.97×	7.28×	15.26×	6.04×	14.82×	10.03×	7.75×
P/B	0.99×	1.02×	0.99×	0.96×	1.07×	1×	1.07×	0.91×
P/S	6.31×	5.77×	5.12×	7.69×	4.61×	8.35×	7.14×	5.93×
EV / EBITDA	20.89×	16.79×	14.6×	32.48×	12.68×	30.83×	18.39×	13.18×
Gross margin	67.2%	72.2%	75.5%	62.0%	81.9%	63.1%	73.9%	78.6%
Operating margin	62.4%	67.4%	71.2%	54.8%	77.9%	58.6%	72.6%	78.4%
Net margin	57.9%	64.3%	70.3%	50.2%	76.4%	56.4%	71.1%	76.7%
Current ratio	1.71×	2.83×	0.44×	0.42×	0.98×	1.46×	2.54×	1.15×
Debt / equity	1.12×	1.03×	1.07×	1.3×	1.26×	1.2×	0.95×	0.71×
Interest coverage	1.9×	2.42×	2.91×	1.44×	4.29×	1.59×	2.78×	3.65×
Dividend yield	8.9%	8.3%	9.3%	9.9%	7.3%	9.5%	8.7%	9.9%
Payout ratio	97.3%	74.8%	67.7%	152.0%	44.3%	140.3%	87.5%	76.5%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	9.1%	11.4%	13.6%	6.3%	17.7%	6.7%	10.6%	11.8%
Return on invested capital	4.3%	5.5%	6.5%	2.7%	7.8%	3.1%	283.2%	6.9%
Return on assets	4.2%	5.4%	6.4%	2.7%	7.5%	3.0%	5.3%	6.7%
Free cash flow yield	8.1%	9.4%	9.0%	8.1%	9.9%	10.2%	8.6%	10.0%
Earnings yield	9.2%	11.1%	13.7%	6.5%	16.6%	6.8%	10.0%	12.9%
Enterprise value	$29.2B	$26.8B	$22.5B	$21.3B	$20.2B	$15.5B	$14.9B	$11.6B
Net debt / EBITDA	10.78×	8.23×	7.4×	18.43×	6.76×	16.59×	8.55×	5.61×
Cash conversion cycle (days)	56	-145	-35	-15	-262	19	-179	-202