Stock of the Day

April 28, 2023

Ares Management (ARES)

$174.00
-$5.70 (-3.2%)
Market Cap: $56.25B

About Ares Management

Ares Management Corporation operates as an alternative asset manager in the United States, Europe, and Asia. The company's Tradable Credit Group segment manages various types of investment funds, such as commingled and separately managed accounts for institutional investors, and publicly traded vehicles and sub-advised funds for retail investors in the tradable and non-investment grade corporate credit markets. Its Direct Lending Group segment provides financing solutions to small-to-medium sized companies. The company's Private Equity Group segment focuses on majority or shared-control investments primarily in under-capitalized companies. Its Real Estate Group segment invests in new developments and the repositioning of assets, with a focus on control or majority-control investments; and originates and invests in a range of self-originated financing opportunities for middle-market owners and operators of commercial real estate. The firm was previously known as Ares Management, L.P. Ares Management Corporation was founded in 1997 and is headquartered in Los Angeles, California with additional offices in the United States, Europe and Asia. Ares Management GP LLC is the general partner of the company.

Ares Management Bull Case

Here are some ways that investors could benefit from investing in Ares Management Co.:

  • Ares Management Co. recently increased its quarterly dividend from $0.93 to $1.12, reflecting a commitment to returning value to shareholders. This increase represents an annualized dividend of $4.48, which can be attractive for income-focused investors.
  • The current stock price of Ares Management Co. is $186.11, which is near its 12-month high of $200.49. This indicates strong market performance and investor confidence in the company's growth potential.
  • The company has a solid return on equity of 16.64%, suggesting effective management and profitability, which can be appealing to investors looking for efficient capital use.
  • Analysts have a consensus rating of "Moderate Buy" for Ares Management Co., with a price target averaging $176.17, indicating potential for price appreciation based on market expectations.
  • Ares Management Co. has a market capitalization of $58.26 billion, which signifies a stable and established presence in the asset management industry, providing a level of security for investors.

Ares Management Bear Case

Investors should be bearish about investing in Ares Management Co. for these reasons:

  • The company has a high dividend payout ratio of 183.25%, which may raise concerns about sustainability. A payout ratio above 100% indicates that the company is paying out more in dividends than it earns, which could be risky in the long term.
  • Ares Management Co. reported earnings per share (EPS) of $1.23 for the latest quarter, missing analysts' expectations of $1.35 by $0.12. This shortfall may indicate potential challenges in meeting growth targets.
  • Insider selling has been significant, with insiders selling 573,181 shares valued at over $101 million in the last 90 days. This could signal a lack of confidence among those closest to the company.
  • The stock has a high price-to-earnings (P/E) ratio of 91.68, which may suggest that the stock is overvalued compared to its earnings, making it a less attractive investment for value-oriented investors.
  • Recent downgrades from analysts, including a "sell" rating from StockNews.com, may indicate a bearish outlook on the stock's future performance, which could deter potential investors.