Financial Survey: Ares Management (ARES) and Its Rivals

Ares Management (NYSE:ARES) is one of 1,743 public companies in the “Capital Markets” industry, but how does it contrast to its peers? We will compare Ares Management to similar businesses based on the strength of its valuation, dividends, institutional ownership, earnings, risk, profitability and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and target prices for Ares Management and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ares Management	0	9	11	1	2.62
Ares Management Competitors	5561	20140	22481	642	2.37

Ares Management presently has a consensus price target of $146.21, suggesting a potential upside of 9.06%. As a group, “Capital Markets” companies have a potential upside of 26.55%. Given Ares Management’s peers higher probable upside, analysts clearly believe Ares Management has less favorable growth aspects than its peers.

Insider and Institutional Ownership

50.0% of Ares Management shares are owned by institutional investors. Comparatively, 30.5% of shares of all “Capital Markets” companies are owned by institutional investors. 34.7% of Ares Management shares are owned by company insiders. Comparatively, 13.0% of shares of all “Capital Markets” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Ares Management has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500. Comparatively, Ares Management’s peers have a beta of 0.79, suggesting that their average share price is 21% less volatile than the S&P 500.

Profitability

This table compares Ares Management and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ares Management	7.51%	25.74%	6.31%
Ares Management Competitors	318.28%	11.55%	3.69%

Earnings and Valuation

This table compares Ares Management and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Ares Management	$5.60 billion	$527.36 million	108.12
Ares Management Competitors	$2.50 billion	$398.65 million	16.97

Ares Management has higher revenue and earnings than its peers. Ares Management is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Dividends

Ares Management pays an annual dividend of $5.40 per share and has a dividend yield of 4.0%. Ares Management pays out 435.5% 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, “Capital Markets” companies pay a dividend yield of 3.2% and pay out 29.2% of their earnings in the form of a dividend. Ares Management has increased its dividend for 7 consecutive years.

Summary

Ares Management beats its peers on 12 of the 15 factors compared.

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.