Ares Capital Corporation (ARCC) vs Invesco Ltd. (IVZ)

Ares Capital Corporation and Invesco Ltd. are both Asset Management companies. Ares Capital Corporation and Invesco Ltd. are of similar size ($13.7B and $13.6B). Invesco Ltd. has negative trailing earnings, so its P/E is not meaningful; Ares Capital Corporation trades at 14.2×. Invesco Ltd. grew revenue faster over the last twelve months: 12.2% against 3.16%. Ares Capital Corporation has the higher net margin (30.9% vs −4.48%) and the higher return on invested capital (3.24% vs −1.34%). Both pay a dividend; Ares Capital Corporation yields more (9.60% vs 5.33%). Across the 21 metrics below, Ares Capital Corporation leads on 14 and Invesco Ltd. on 7.

Valuation

Metric ARCC IVZ Asset Management median
P/E 14.23 n/m 14.62
P/S 4.44 2.02 2.97
P/B 0.99 1.32 0.94
Price to free cash flow n/m 7.27 8.93
EV/EBITDA 12.12 16.34 10.32
EV/Sales 9.32 3.43 5.72
Earnings yield 7.03% (2.20%) 4.53%
Free cash flow yield (4.93%) 13.76% 4.65%

Profitability

Metric ARCC IVZ Asset Management median
Gross margin 100.00% 66.01% 100.00%
Operating margin 75.76% (7.10%) 33.03%
Net margin 30.91% (4.48%) 13.53%
Free cash flow margin (21.89%) 27.83% 12.44%
Return on equity 6.88% (2.81%) 4.83%
Return on assets 3.22% (1.10%) 1.57%
Return on invested capital 3.24% (1.34%) 3.04%

Growth

Metric ARCC IVZ Asset Management median
Revenue growth (TTM) 3.16% 12.18% 6.97%
EPS growth (last fiscal year) (23.77%) (235.59%) —
Revenue growth, 5-year CAGR 15.10% 0.74% 12.13%
Net income growth, 5-year CAGR 21.83% 0.00% 0.00%

Health

Metric ARCC IVZ Asset Management median
Debt to equity 1.14 0.81 0.42
Current ratio 1.28 1.31 1.28
Net debt to EBITDA 6.59 7.77 1.06

Dividend

Metric ARCC IVZ Asset Management median
Dividend yield 9.60% 5.33% 6.92%
Payout ratio 1.14 0.54 0.77

Size

Metric ARCC IVZ Asset Management median
Market cap 13.72b 13.55b 721.34m

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