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Ares Capital Corporation

ARCC
50
Asset Management · Financial Services
Also trades as: 0HHP.L GBP 0.19 (+1.63%)
Price
$18.79
+0.39 (+2.12%)
Market Cap
$13.49B
Exchange
NASDAQ
Winston Score
50
Winston is curious
Mixed quality — meaningful strengths and weaknesses.
Data as of Oct 23, 2026 · filings through Jun 30, 2026

§How the score breaks down

Quality
Strong
21/30
Growth
Weak
3/20
Cash Flow
Exceptional
10/10
Stability
Mixed
3/10
Valuation
Strong
8/10
Ownership
Weak
2/15
Dividends
Good
3/5

50 of 100 counted points = Winston Score 50.

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Share count rising — dilution

+56.7% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 446.0M (2021) → 699.0M (2025)

§Winston Score History

The full picture

Ares Capital Corporation is a specialty finance company that lends money to mid-sized businesses across the United States. These are companies too small for big public bond markets but too large for a typical bank loan. Ares Capital is the largest publicly traded Business Development Company (BDC) in the US, making it a major player in the private credit market.

Ares Capital makes money by charging interest on the loans and debt investments it makes to hundreds of middle-market companies. It is structured as a BDC, which means it must pay out most of its income to shareholders as dividends. The company is managed by Ares Management, a large alternative asset manager, giving it access to deep deal flow and credit expertise — a meaningful competitive advantage. The main risk is that rising loan defaults during an economic downturn could hurt earnings and force dividend cuts, since the portfolio is concentrated in leveraged, privately held businesses.

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+32.6% YoY

YoY Growth Rate

Revenue accelerating

EPS Growth

-53.8% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$0/ year

0.0% of revenue

Below sector average (7%)

Research and development spending

Insider Activity

0.6%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$383M cash & investments

Company generates more cash than it spends — no dilution risk from fundraising

Revenue accelerating

Ares Capital Corporation grew revenue 33% year-over-year and the growth rate is speeding up. That's the kind of momentum growth investors look for — the question is whether margins can follow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale
Gross Margin
77.5%
Premium pricing power — 77.5% gross margin
Profit after running costs
Operating Margin
75.7%
Excellent — 75.7% operating margin
Return on the money invested
ROCE
4.9%
Weak — 4.9% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales growth
Sales YoY
+4.9%
Slow sales growth (+4.9% YoY)
Profit growth
EPS YoY
-34.1%
Earnings shrinking (-34.1% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

How steady the profit is
EPS Consistency
0/8 quarters
Earnings rarely grow — volatile business

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Cash Flow

Profit that turns into cash
Cash Conversion
111%
Turns 111% of profit into real cash
Spare cash per sale
FCF Margin
46.0%
Converts sales into free cash efficiently (46.0%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns
Debt / Equity
1.14
Elevated debt (1.14)
Covers its interest
Interest Cover
1.81x
Dangerous — barely covers interest (1.8x)

Interest coverage between 1 and 3. Profits cover interest, but with little room to spare.

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Valuation

Price vs profit
P/E Ratio (TTM)
13.9x
Attractive valuation — P/E 13.9

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

Cheaper or dearer next year
P/E vs Forward
+4.1
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (13.9 → 9.8)

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Dividends

Dividend
Dividend Yield
10.18%
Healthy income — 10.18% yield

Yield above 6% — often a flag the market is pricing in a cut.

Dividend record
Dividend Growth
+0.0%
Dividend flat
Payout Ratio
138%
no trend
Paying out more than the last 12 months of profit. The dividend is being funded from cash or borrowing, not this year’s earnings.

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