Ares Management vs Ares Capital Which Performs Better?
Ares Management Corporation (AMC) and Ares Capital Corporation (ARCC) are two separate entities within the Ares family of investment companies. Ares Management is a global alternative asset manager, specializing in private equity, credit, and real estate investments. Ares Capital is a business development company that focuses on providing financing solutions to middle-market companies. Both stocks offer investors exposure to the financial services industry, but their business models and investment strategies differ. Investors should carefully consider their individual risk tolerance and investment objectives before choosing between Ares Management and Ares Capital stocks.
Ares Management or Ares Capital?
When comparing Ares Management and Ares Capital, 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 Management and Ares Capital.
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 Management has a dividend yield of 2.28%, while Ares Capital has a dividend yield of 8.48%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Ares Management reports a 5-year dividend growth of 23.78% year and a payout ratio of 336.87%. On the other hand, Ares Capital reports a 5-year dividend growth of 3.20% year and a payout ratio of 74.84%.
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 Management P/E ratio at 70.72 and Ares Capital's P/E ratio at 9.74. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Ares Management P/B ratio is 9.11 while Ares Capital's P/B ratio is 1.11.
Growth Investors:
Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Ares Management has seen a 5-year revenue growth of 0.25%, while Ares Capital's is 1.02%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Ares Management's ROE at 19.45% and Ares Capital's ROE at 12.09%.
Retail Investors:
Retail investors often consider stock affordability and company familiarity. For example, day low prices are $157.76 for Ares Management and $22.40 for Ares Capital. Over the past year, Ares Management's prices ranged from $125.23 to $200.49, with a yearly change of 60.09%. Ares Capital's prices fluctuated between $19.32 and $23.84, with a yearly change of 23.40%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.
