Critical Comparison: Ares Management L.P. (ARES) & Its Rivals
Ares Management L.P. (NYSE: ARES) is one of 56 public companies in the “Investment Management” industry, but how does it weigh in compared to its competitors? We will compare Ares Management L.P. to similar companies based on the strength of its institutional ownership, profitability, earnings, risk, analyst recommendations, valuation and dividends.
This table compares Ares Management L.P. and its competitors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ares Management L.P.||5.86%||40.94%||7.01%|
|Ares Management L.P. Competitors||29.46%||111.90%||29.45%|
Volatility and Risk
Ares Management L.P. has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500. Comparatively, Ares Management L.P.’s competitors have a beta of 1.41, meaning that their average stock price is 41% more volatile than the S&P 500.
Earnings & Valuation
This table compares Ares Management L.P. and its competitors top-line revenue, earnings per share and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Ares Management L.P.||$1.47 billion||$260.09 million||24.86|
|Ares Management L.P. Competitors||$858.81 million||$242.87 million||-10.65|
Ares Management L.P. has higher revenue and earnings than its competitors. Ares Management L.P. is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.
This is a breakdown of current ratings for Ares Management L.P. and its competitors, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ares Management L.P.||0||1||6||0||2.86|
|Ares Management L.P. Competitors||661||2031||1955||37||2.29|
Ares Management L.P. currently has a consensus target price of $21.50, indicating a potential upside of 18.46%. As a group, “Investment Management” companies have a potential downside of 1.33%. Given Ares Management L.P.’s stronger consensus rating and higher probable upside, research analysts clearly believe Ares Management L.P. is more favorable than its competitors.
Insider and Institutional Ownership
14.7% of Ares Management L.P. shares are held by institutional investors. Comparatively, 52.0% of shares of all “Investment Management” companies are held by institutional investors. 26.7% of shares of all “Investment Management” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Ares Management L.P. pays an annual dividend of $1.24 per share and has a dividend yield of 6.8%. Ares Management L.P. pays out 169.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Investment Management” companies pay a dividend yield of 3.7% and pay out 66.3% of their earnings in the form of a dividend.
Ares Management L.P. competitors beat Ares Management L.P. on 8 of the 15 factors compared.
About Ares Management L.P.
Ares Management, L.P. is an alternative asset manager. The Company offers its investors a range of investment strategies. It operates through three segments: Credit Group, Private Equity Group and Real Estate Group. The Credit Group segment manages credit strategies across the non-investment grade credit universe in the United States and Europe. It offers a range of credit strategies across the liquid and illiquid spectrum, including syndicated loans, high yield bonds, credit opportunities, structured credit investments and the United States and European direct lending. The Credit Group provides solutions for traditional fixed income investors. The Private Equity Group segment categorizes its investment strategies as corporate private equity, the United States power and energy infrastructure and special situations. The Real Estate Group segment manages public and private equity and debt strategies. The Real Estate Group manages both a value-add strategy and an opportunistic strategy.
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