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ARCC vs. HLI: Ares Capital vs. Houlihan Lokey Stock Comparison

How do Ares Capital (ARCC) and Houlihan Lokey (HLI) stack up? This page sets them side by side across company profile, performance and risk, profitability, growth, financial strength, dividends, and valuation, with selected fundamentals also measured against each stock's industry-group peers.

Company Profile

Ares Capital (ARCC) and Houlihan Lokey (HLI) both belong to the Capital Markets industry, though ARCC is classified under Asset Management & Custody Banks while HLI falls under Investment Banking & Brokerage.

Company profile comparison for Ares Capital (ARCC) and Houlihan Lokey (HLI)
Profile ItemARCCHLI
NameAres Capital Corp.Houlihan Lokey, Inc.
Country/RegionUnited StatesUnited States
GICS SectorFinancialsFinancials
GICS Industry GroupFinancial ServicesFinancial Services
GICS IndustryCapital MarketsCapital Markets
GICS Sub-IndustryAsset Management & Custody BanksInvestment Banking & Brokerage
Market Capitalization13.82 billion USD10.13 billion USD
CurrencyUSDUSD
ExchangeNasdaqNYSE
Listing DateOctober 5, 2004August 13, 2015
Security TypeCommon StockCommon Stock

Price Performance

Cumulative Growth

ARCC
HLI
GSPC
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Ares Capital (ARCC) vs. Houlihan Lokey (HLI), with S&P 500 (GSPC) for reference: Growth of a $10,000 investment over the past five years. Adjusted for dividends and splits.

Trailing Returns

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Trailing total returns for Ares Capital (ARCC) and Houlihan Lokey (HLI). Returns over one year are annualized.

Calendar-Year Returns

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Calendar-year total returns for Ares Capital (ARCC) and Houlihan Lokey (HLI). Each bar is that year's total return, measured year-end to year-end.

Performance Metrics

Price performance metrics for Ares Capital (ARCC) and Houlihan Lokey (HLI)
MetricARCCHLI
Total Return (1Y)5.40%-16.23%
Total Return (3Y, Annualized)9.48%15.13%
Total Return (5Y, Annualized)8.26%6.74%

Risk Profile

Drawdown History

ARCC
HLI
GSPC
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Ares Capital (ARCC) vs. Houlihan Lokey (HLI), with S&P 500 (GSPC) for reference: Drawdown from the running peak over the past five years. Each line shows the decline from its prior peak; 0% marks a new high.

Return Distribution

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Distribution of monthly total returns for Ares Capital (ARCC) and Houlihan Lokey (HLI). Each bar is the share of months whose return fell in that 5% bucket.

Risk Metrics

Risk profile metrics for Ares Capital (ARCC) and Houlihan Lokey (HLI)
MetricARCCHLI
Volatility (1Y, Annualized)18.97%31.00%
Beta (5Y)0.590.87
Max Drawdown (5Y)-21.76%-40.30%
Avg. Volume (3M)4.45M816.85K

Risk-Adjusted Performance

Risk-Return Positioning

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ARCC and HLI are plotted by 1-year volatility (risk) and 1-year return. The dashed Capital Allocation Line runs from the risk-free rate through the shared industry median.

Risk-Adjusted Metrics

Risk-adjusted metrics for Ares Capital (ARCC) and Houlihan Lokey (HLI)
MetricARCCHLI
Sharpe Ratio (1Y)0.06-0.66
Sortino Ratio (1Y)0.09-0.91

Profitability

ROE (TTM)

Both Ares Capital (ARCC) at 6.19% and Houlihan Lokey (HLI) at 17.29% land near their industries’ usual ROE ranges, so capital efficiency looks broadly in line with peers on both sides.

ARCC

Financial Services industry group

6.19%

Max
44.78%
Q3
21.85%
Median
12.91%
ARCC
6.19%
Q1
4.48%
Min
-18.71%

HLI

Financial Services industry group

17.29%

Max
44.78%
Q3
21.85%
HLI
17.29%
Median
12.91%
Q1
4.48%
Min
-18.71%
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Ares Capital (ARCC) vs. Houlihan Lokey (HLI): A comparison of their ROE against the Financial Services industry group benchmark.

Net Margin (TTM)

Ares Capital (ARCC) at 28.35% retains a top-quartile share of revenue as profit, ahead of Houlihan Lokey (HLI) at 15.80%, which keeps about the industry-typical share.

ARCC

Financial Services industry group

28.35%

Max
62.84%
ARCC
28.35%
Q3
28.05%
Median
15.36%
Q1
4.82%
Min
-28.52%

HLI

Financial Services industry group

15.80%

Max
62.84%
Q3
28.05%
HLI
15.80%
Median
15.36%
Q1
4.82%
Min
-28.52%
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Ares Capital (ARCC) vs. Houlihan Lokey (HLI): A comparison of their net margin against the Financial Services industry group benchmark.

Operating Margin (TTM)

Ares Capital (ARCC) at 72.74% operates in the top operating margin quartile, ahead of Houlihan Lokey (HLI) at 24.42%, which runs around its industry’s norm.

ARCC

Financial Services industry group

72.74%

Max
107.33%
ARCC
72.74%
Q3
55.90%
Median
30.09%
Q1
14.60%
Min
-44.34%

HLI

Financial Services industry group

24.42%

Max
107.33%
Q3
55.90%
Median
30.09%
HLI
24.42%
Q1
14.60%
Min
-44.34%
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Ares Capital (ARCC) vs. Houlihan Lokey (HLI): A comparison of their operating margin against the Financial Services industry group benchmark.

Profitability Metrics

Profitability metrics for Ares Capital (ARCC) and Houlihan Lokey (HLI)
MetricARCCHLI
ROE (TTM)6.19%17.29%
ROA (TTM)4.78%10.38%
Net Margin (TTM)28.35%15.80%
Operating Margin (TTM)72.74%24.42%
Gross Margin (TTM)----

Growth

Revenue Growth

Houlihan Lokey (HLI) at 9.55% is around its peer norm for revenue growth, while Ares Capital (ARCC) at -12.08% drops into the bottom quartile, signaling weaker demand or pricing momentum.

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Ares Capital (ARCC) vs. Houlihan Lokey (HLI): A comparison of their Revenue Growth across different time periods.

EPS Growth

Both Ares Capital (ARCC) at -23.77% and Houlihan Lokey (HLI) at 6.87% land near their industries' usual EPS growth ranges, so bottom-line momentum looks broadly in line with peers on both sides.

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Ares Capital (ARCC) vs. Houlihan Lokey (HLI): A comparison of their EPS Growth across different time periods.

Growth Metrics

Growth metrics for Ares Capital (ARCC) and Houlihan Lokey (HLI)
MetricARCCHLI
Revenue Growth (YoY)-12.08%9.55%
Revenue Growth (3Y CAGR)26.67%13.10%
EPS Growth (YoY)-23.77%6.87%
EPS Growth (3Y CAGR)16.05%16.05%

Financial Strength

Current Ratio (MRQ)

current ratio doesn’t apply on either side: Ares Capital (ARCC) in Financial Services and Houlihan Lokey (HLI) in Financial Services both report balance sheets without a current/non-current split, so their short-term liquidity is better judged through regulatory and funding measures.

Debt / Equity (MRQ)

debt-to-equity ratio is set aside for both: Ares Capital (ARCC) in Financial Services and Houlihan Lokey (HLI) in Financial Services run businesses where balance-sheet leverage is part of the model, so capital-adequacy and funding measures are the better gauges of balance-sheet risk.

Financial Strength Metrics

Financial strength metrics for Ares Capital (ARCC) and Houlihan Lokey (HLI)
MetricARCCHLI
Current Ratio (MRQ)----
Debt / Equity (MRQ)----
Net Debt / EBITDA----

Dividends

Dividend Yield (TTM)

Houlihan Lokey (HLI) at 1.77% pays an industry-typical yield; Ares Capital (ARCC) at 9.92% is above its entire peer range — the higher number, but one that calls for a look at payout sustainability before treating it as an advantage.

ARCC

Financial Services industry group

9.92%

ARCC
9.92%
Max
9.77%
Q3
3.92%
Median
1.09%
Q1
0.00%
Min
0.00%

HLI

Financial Services industry group

1.77%

Max
9.77%
Q3
3.92%
HLI
1.77%
Median
1.09%
Q1
0.00%
Min
0.00%
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Ares Capital (ARCC) vs. Houlihan Lokey (HLI): A comparison of their dividend yield against the Financial Services industry group benchmark.

Dividend Payout Ratio (TTM)

Ares Capital (ARCC) reports payout ratio above 100% at 157.38%, meaning dividends exceeded current-period earnings and sustainability needs extra context. Meanwhile Houlihan Lokey (HLI) reports 43.62%, ranking against industry peers normally.

ARCC

Financial Services industry group

157.38%

Max
241.07%
ARCC
157.38%
Q3
97.36%
Median
25.77%
Q1
0.00%
Min
0.00%

HLI

Financial Services industry group

43.62%

Max
241.07%
Q3
97.36%
HLI
43.62%
Median
25.77%
Q1
0.00%
Min
0.00%
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Ares Capital (ARCC) vs. Houlihan Lokey (HLI): A comparison of their payout ratio against the Financial Services industry group benchmark.

Dividend Metrics

Dividend metrics for Ares Capital (ARCC) and Houlihan Lokey (HLI)
MetricARCCHLI
Dividend Yield (TTM)9.92%1.77%
Dividend Payout Ratio (TTM)157.38%43.62%

Valuation

P/E Ratio (TTM)

Both Ares Capital (ARCC) at 15.68 and Houlihan Lokey (HLI) at 24.47 land around their industries’ usual P/E ratio levels — neither is getting a clear earnings-multiple discount or premium versus peers.

ARCC

Financial Services industry group

15.68

Max
45.85
Q3
24.64
ARCC
15.68
Median
15.37
Q1
9.68
Min
0.16

HLI

Financial Services industry group

24.47

Max
45.85
Q3
24.64
HLI
24.47
Median
15.37
Q1
9.68
Min
0.16
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Ares Capital (ARCC) vs. Houlihan Lokey (HLI): A comparison of their P/E ratio against the Financial Services industry group benchmark.

P/S Ratio (TTM)

On P/S ratio, both Ares Capital (ARCC) at 4.48 and Houlihan Lokey (HLI) at 3.96 are priced roughly in line with their industries — neither looks cheap nor rich on a sales basis.

ARCC

Financial Services industry group

4.48

Max
9.23
Q3
4.57
ARCC
4.48
Median
2.72
Q1
1.28
Min
-0.55

HLI

Financial Services industry group

3.96

Max
9.23
Q3
4.57
HLI
3.96
Median
2.72
Q1
1.28
Min
-0.55
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Ares Capital (ARCC) vs. Houlihan Lokey (HLI): A comparison of their P/S ratio against the Financial Services industry group benchmark.

P/B Ratio (MRQ)

Ares Capital (ARCC) at 0.99 is valued about in line with its industry on P/B ratio, while Houlihan Lokey (HLI) at 4.39 carries an above-peer premium to book — HLI is pricier on assets.

ARCC

Financial Services industry group

0.99

Max
7.79
Q3
3.63
Median
1.57
ARCC
0.99
Q1
0.81
Min
-0.39

HLI

Financial Services industry group

4.39

Max
7.79
HLI
4.39
Q3
3.63
Median
1.57
Q1
0.81
Min
-0.39
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Ares Capital (ARCC) vs. Houlihan Lokey (HLI): A comparison of their P/B ratio against the Financial Services industry group benchmark.

Valuation Metrics

Valuation metrics for Ares Capital (ARCC) and Houlihan Lokey (HLI)
MetricARCCHLI
P/E Ratio (TTM)15.6824.47
P/S Ratio (TTM)4.483.96
P/B Ratio (MRQ)0.994.39
Free Cash Flow Yield (TTM)----