ARCC vs. BEN, KIM, UDR, WPC, HST, EQH, AMH, LAMR, GLPI, and BAP
Should you be buying Ares Capital stock or one of its competitors? The main competitors of Ares Capital include Franklin Resources (BEN), Kimco Realty (KIM), UDR (UDR), W. P. Carey (WPC), Host Hotels & Resorts (HST), Equitable (EQH), American Homes 4 Rent (AMH), Lamar Advertising (LAMR), Gaming and Leisure Properties (GLPI), and Credicorp (BAP). These companies are all part of the "finance" sector.
Franklin Resources (NYSE:BEN) and Ares Capital (NASDAQ:ARCC) are both large-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, community ranking, institutional ownership, dividends, earnings, analyst recommendations, media sentiment and profitability.
Ares Capital has a net margin of 62.77% compared to Ares Capital's net margin of 11.09%. Franklin Resources' return on equity of 12.37% beat Ares Capital's return on equity.
Franklin Resources received 42 more outperform votes than Ares Capital when rated by MarketBeat users. However, 62.50% of users gave Ares Capital an outperform vote while only 40.78% of users gave Franklin Resources an outperform vote.
Franklin Resources pays an annual dividend of $1.24 per share and has a dividend yield of 5.1%. Ares Capital pays an annual dividend of $1.92 per share and has a dividend yield of 9.0%. Franklin Resources pays out 70.9% of its earnings in the form of a dividend. Ares Capital pays out 65.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Franklin Resources has raised its dividend for 1 consecutive years and Ares Capital has raised its dividend for 3 consecutive years. Ares Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
In the previous week, Franklin Resources had 2 more articles in the media than Ares Capital. MarketBeat recorded 10 mentions for Franklin Resources and 8 mentions for Ares Capital. Franklin Resources' average media sentiment score of 1.06 beat Ares Capital's score of 0.29 indicating that Ares Capital is being referred to more favorably in the news media.
47.6% of Franklin Resources shares are owned by institutional investors. Comparatively, 27.4% of Ares Capital shares are owned by institutional investors. 24.1% of Franklin Resources shares are owned by company insiders. Comparatively, 0.6% of Ares Capital shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Ares Capital has lower revenue, but higher earnings than Franklin Resources. Ares Capital is trading at a lower price-to-earnings ratio than Franklin Resources, indicating that it is currently the more affordable of the two stocks.
Franklin Resources has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500. Comparatively, Ares Capital has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.
Franklin Resources presently has a consensus target price of $26.00, suggesting a potential upside of 7.08%. Ares Capital has a consensus target price of $21.43, suggesting a potential upside of 0.70%. Given Ares Capital's higher probable upside, research analysts clearly believe Franklin Resources is more favorable than Ares Capital.
Summary
Ares Capital beats Franklin Resources on 13 of the 21 factors compared between the two stocks.
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This chart shows the number of new MarketBeat users adding ARCC and its top 5 competitors to their watchlist. Each company is represented with a line over a 90 day period.
Skip ChartThis chart shows the average media sentiment of NASDAQ and its competitors over the past 90 days as caculated by MarketBeat. The averaged score is equivalent to the following: Very Negative Sentiment <= -1.5, Negative Sentiment > -1.5 and <= -0.5, Neutral Sentiment > -0.5 and < 0.5, Positive Sentiment >= 0.5 and < 1.5, and Very Positive Sentiment >= 1.5.
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