Stock fact sheet · data as of
Ares Capital Corporation (ARCC): fair value, margin of safety and Wheel Score
Financial Services · Asset Management · United States · High Yield Income
Is ARCC undervalued?
At 18.92 (close of 16 Oct 2026), ARCC trades 23% under the GLS average fair value of 24.65. 6 of the 9 models that produced a value land above the price. A discount of this size counts as a positive margin of safety in every GLS screen; whether it is enough depends on the rest of the picture - the health score, the moat and the option premium below.
There is a wide gap between Lynch (5.35) and DCF (49.92). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.
The nightly engine files ARCC under High Yield Income: a dividend yield above 4%.
Nine valuation models for ARCC
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 49.92 | +164% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 24.13 | +28% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 21.57 | +14% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 5.35 | -72% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 11.32 | -40% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 32.51 | +72% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 33.95 | +79% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 28.25 | +49% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 14.86 | -21% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -21.43 | -213% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 19.00 | +0% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Ares Capital Corporation scores 5 of 9 on the Piotroski F-score: a middling result that falls one point short of the Sunday Scan's "6 or more" rule. Some of the nine tests on profitability, leverage and efficiency are failed, so the accounts are worth a look before selling a put on the name. A GLS Moat score of 2.5/10 is a weak reading: the ten-year history the score grades (revenue, EPS, book value, margins, cash flow, share count, ROIC) has not been steady, so the Moat part of the Wheel Score contributes little.
Returns on capital are thin or negative - ROIC 4.3%, ROE 9.1%, ROA 4.2% - with debt at 1.12 times equity and a free-cash-flow yield of 7.8%.
The dividend yield is high at 10.15% (payout ratio 138%) - a payout above 100% of earnings, which is not covered by profits. A yield this size is often the market's way of pricing a risk to the payout, so the health score and cash flow matter more than usual.
Institutional ownership scores 4/10, insider activity 10/10 and Congressional trading 1/10 on the GLS smart-money scales.
| Piotroski F-score | 5 / 9 | ROIC | 4.3% |
|---|---|---|---|
| GLS Moat | 2.5 / 10 | ROE | 9.1% |
| Debt / equity | 1.12 | ROA | 4.2% |
| Free-cash-flow yield | 7.8% | Payout ratio | 138% |
| Institutions | 4 / 10 | Insiders · Congress | 10 · 1 / 10 |
Wheel Score 68: Good
With a Wheel Score of 68 - the Good band - Ares Capital Corporation falls just short of the Sunday Scan's "70 or higher" rule. The parts: Value 22/25, Health 11/20, Moat 4/15, Premium 11/20, Stability 20/20; Moat (4/15) scores lowest.
Implied volatility is 26% on the near-the-money contracts 20-60 days out: some premium, but under the 35-60% range the Wheel Score pays full marks for (11 of 20 points). The option chain is deep: 140,453 contracts of open interest across all expiries, which means tight fills at most strikes.
Volume runs at 4.0M shares a day on a market cap of $13.6B, with a beta of 0.66 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 20 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 22 / 25 | 23% margin of safety | |
| Health | 11 / 20 | Piotroski 5/9 | |
| Moat | 4 / 15 | moat 2.5/10 | |
| Premium | 11 / 20 | implied volatility 26% | |
| Stability | 20 / 20 | 4.0M shares/day, $13.6B cap, beta 0.66 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
Ares Capital Corporation reports earnings on 27 Oct 2026 (before the open) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Asset Management
The 12 companies below are the closest to Ares Capital Corporation by market cap within the Asset Management industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| FAOTX American Funds 2020 Target Date Retirement Fd Cl F-1 | 14.61 | 74.57 | +80% | 39No options | $13.3B |
| OWL Blue Owl Capital Inc. | 8.97 | 9.96 | +10% | 75Good | $14.0B |
| CG The Carlyle Group Inc. | 36.81 | 30.81 | -19% | 45Weak | $13.1B |
| DFUSX DFA US Large Company Portfolio | 51.41 | 7.42 | -593% | 24No options | $14.3B |
| IVZ Invesco Ltd. | 28.80 | 37.04 | +22% | 45Weak | $12.7B |
| SWISX Schwab Capital Trust - Schwab International Index Fund | 31.27 | 418.51 | +93% | 39No options | $14.5B |
| EQH Equitable Holdings, Inc. | 53.49 | 103.50 | +48% | 45Weak | $14.6B |
| HLMNX Harding Loevner International Equity Portfolio | 31.32 | 27.87 | -12% | 39No options | $12.6B |
| SEIC SEI Investments Company | 105.27 | 99.91 | -5% | 70Good | $12.6B |
| PHYS Sprott Physical Gold Trust | 30.96 | 147.63 | +79% | 39No options | $14.7B |
| RRTBX T. Rowe Price Retirement 2020 Fund Class R | 20.15 | 295.05 | +93% | 39No options | $12.4B |
| CRBG Corebridge Financial, Inc. | 34.43 | 54.56 | +37% | 87Prime | $15.3B |
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Start free See the Sunday ScanQuestions about ARCC
Is ARCC undervalued right now?
By the GLS models, moderately: at 18.92 the stock trades 23% below the average fair value of 24.65 (data as of 16 Oct 2026).
What is the Wheel Score of ARCC and what does it mean?
ARCC scores 68 out of 100 (Good). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for ARCC?
24.65 per share as of 16 Oct 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Ares Capital Corporation report earnings next?
The next earnings report is due on 27 Oct 2026 (before the open), 11 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does ARCC have listed options, and how liquid are they?
Yes. The nightly snapshot found 346 listed contracts with 140,453 open interest across all expiries and implied volatility of 26% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.