ARCC vs. BK, AMP, TROW, STT, NTRS, BEN, SEIC, IVZ, AMG, and MAIN
Should you be buying Ares Capital stock or one of its competitors? The main competitors of Ares Capital include Bank of New York Mellon (BK), Ameriprise Financial (AMP), T. Rowe Price Group (TROW), State Street (STT), Northern Trust (NTRS), Franklin Resources (BEN), SEI Investments (SEIC), Invesco (IVZ), Affiliated Managers Group (AMG), and Main Street Capital (MAIN). These companies are all part of the "asset management & custody banks" industry.
Ares Capital (NASDAQ:ARCC) and Bank of New York Mellon (NYSE:BK) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, earnings, profitability, community ranking, valuation, analyst recommendations, media sentiment and institutional ownership.
Ares Capital has a net margin of 62.77% compared to Bank of New York Mellon's net margin of 9.48%. Ares Capital's return on equity of 12.37% beat Bank of New York Mellon's return on equity.
27.4% of Ares Capital shares are owned by institutional investors. Comparatively, 85.3% of Bank of New York Mellon shares are owned by institutional investors. 0.6% of Ares Capital shares are owned by company insiders. Comparatively, 0.1% of Bank of New York Mellon shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
In the previous week, Ares Capital had 1 more articles in the media than Bank of New York Mellon. MarketBeat recorded 8 mentions for Ares Capital and 7 mentions for Bank of New York Mellon. Bank of New York Mellon's average media sentiment score of 1.45 beat Ares Capital's score of 1.15 indicating that Bank of New York Mellon is being referred to more favorably in the news media.
Bank of New York Mellon has higher revenue and earnings than Ares Capital. Ares Capital is trading at a lower price-to-earnings ratio than Bank of New York Mellon, indicating that it is currently the more affordable of the two stocks.
Ares Capital pays an annual dividend of $1.92 per share and has a dividend yield of 8.9%. Bank of New York Mellon pays an annual dividend of $1.68 per share and has a dividend yield of 2.8%. Ares Capital pays out 65.8% of its earnings in the form of a dividend. Bank of New York Mellon pays out 41.0% 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.
Bank of New York Mellon received 475 more outperform votes than Ares Capital when rated by MarketBeat users. Likewise, 67.15% of users gave Bank of New York Mellon an outperform vote while only 62.56% of users gave Ares Capital an outperform vote.
Ares Capital presently has a consensus target price of $21.50, suggesting a potential downside of 0.32%. Bank of New York Mellon has a consensus target price of $60.17, suggesting a potential upside of 0.93%. Given Bank of New York Mellon's higher possible upside, analysts clearly believe Bank of New York Mellon is more favorable than Ares Capital.
Ares Capital has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, Bank of New York Mellon has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.
Summary
Bank of New York Mellon beats Ares Capital on 11 of the 19 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.
This 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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