Ares Capital vs Ares Management Which Is More Promising?

Ares Capital Corporation and Ares Management Corporation are two leading investment firms in the financial sector. While both companies share the same name, they operate differently in terms of their investment strategies and objectives. Ares Capital focuses on providing financing solutions to middle-market companies, while Ares Management is primarily involved in managing alternative investments and private equity funds. Investors looking to diversify their portfolios may consider both Ares Capital and Ares Management stocks for potential growth opportunities.

Ares Capital or Ares Management?

When comparing Ares Capital and Ares Management, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Ares Capital and Ares Management.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Ares Capital has a dividend yield of 8.85%, while Ares Management has a dividend yield of 1.53%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Ares Capital reports a 5-year dividend growth of 4.51% year and a payout ratio of 69.65%. On the other hand, Ares Management reports a 5-year dividend growth of 18.23% year and a payout ratio of 327.57%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Ares Capital P/E ratio at 8.73 and Ares Management's P/E ratio at 81.79. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Ares Capital P/B ratio is 1.08 while Ares Management's P/B ratio is 17.64.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Ares Capital has seen a 5-year revenue growth of 0.82%, while Ares Management's is 0.97%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Ares Capital's ROE at 13.09% and Ares Management's ROE at 23.14%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $21.50 for Ares Capital and $182.27 for Ares Management. Over the past year, Ares Capital's prices ranged from $19.32 to $22.44, with a yearly change of 16.15%. Ares Management's prices fluctuated between $112.83 and $185.06, with a yearly change of 64.02%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.