ARCC vs. MCO: A Head-to-Head Stock Comparison
Updated onHere’s a clear look at ARCC and MCO, comparing key factors like historical performance, profitability, financial strength, growth, dividend, and valuation.
Company Overview
MCO’s market capitalization of 90.86 billion USD is significantly greater than ARCC’s 15.56 billion USD, highlighting its more substantial market valuation.
MCO carries a higher beta at 1.38, indicating it’s more sensitive to market moves, while ARCC (beta: 0.73) exhibits greater stability.
| Symbol | ARCC | MCO |
|---|---|---|
| Company Name | Ares Capital Corporation | Moody's Corporation |
| Country | US | US |
| Sector | Financial Services | Financial Services |
| Industry | Asset Management | Financial - Data & Stock Exchanges |
| CEO | Kort Schnabel | Robert Scott Fauber |
| Price | 22.41 USD | 505.06 USD |
| Market Cap | 15.56 billion USD | 90.86 billion USD |
| Beta | 0.73 | 1.38 |
| Exchange | NASDAQ | NYSE |
| IPO Date | October 5, 2004 | October 31, 1994 |
| ADR | No | No |
Historical Performance
This chart compares the performance of ARCC and MCO by tracking the growth of an initial $10,000 investment in each. Use the tabs to select the desired time period.
Data is adjusted for dividends and splits.
Profitability
Return on Equity
ARCC
11.03%
Asset Management Industry
- Max
- 34.25%
- Q3
- 18.22%
- Median
- 11.24%
- Q1
- 5.81%
- Min
- -5.72%
ARCC’s Return on Equity of 11.03% is on par with the norm for the Asset Management industry, indicating its profitability relative to shareholder equity is typical for the sector.
MCO
56.36%
Financial - Data & Stock Exchanges Industry
- Max
- 26.26%
- Q3
- 23.14%
- Median
- 14.33%
- Q1
- 11.12%
- Min
- -0.64%
MCO’s Return on Equity of 56.36% is exceptionally high, placing it well beyond the typical range for the Financial - Data & Stock Exchanges industry. This demonstrates a superior ability to generate profit from shareholder investments, though it could also be inflated by high financial leverage.
Return on Invested Capital
ARCC
208.60%
Asset Management Industry
- Max
- 42.18%
- Q3
- 20.06%
- Median
- 8.68%
- Q1
- 3.13%
- Min
- -16.42%
ARCC’s Return on Invested Capital of 208.60% is exceptionally high, placing it well beyond the typical range for the Asset Management industry. This demonstrates an outstanding ability to deploy capital efficiently and create significant value.
MCO
18.31%
Financial - Data & Stock Exchanges Industry
- Max
- 18.31%
- Q3
- 14.86%
- Median
- 11.07%
- Q1
- 6.75%
- Min
- 4.04%
In the upper quartile for the Financial - Data & Stock Exchanges industry, MCO’s Return on Invested Capital of 18.31% signifies a highly effective use of its capital to generate profits when compared to its peers.
Net Profit Margin
ARCC
67.48%
Asset Management Industry
- Max
- 91.66%
- Q3
- 57.81%
- Median
- 29.48%
- Q1
- 15.70%
- Min
- -27.65%
A Net Profit Margin of 67.48% places ARCC in the upper quartile for the Asset Management industry, signifying strong profitability and more effective cost management than most of its peers.
MCO
29.14%
Financial - Data & Stock Exchanges Industry
- Max
- 39.08%
- Q3
- 31.63%
- Median
- 23.20%
- Q1
- 18.09%
- Min
- -0.88%
MCO’s Net Profit Margin of 29.14% is aligned with the median group of its peers in the Financial - Data & Stock Exchanges industry. This indicates its ability to convert revenue into profit is typical for the sector.
Operating Profit Margin
ARCC
91.13%
Asset Management Industry
- Max
- 99.76%
- Q3
- 78.28%
- Median
- 34.76%
- Q1
- 21.75%
- Min
- -48.25%
An Operating Profit Margin of 91.13% places ARCC in the upper quartile for the Asset Management industry. This signals a strong ability to translate revenue into operating profit, outperforming most of its competitors in core business efficiency.
MCO
40.63%
Financial - Data & Stock Exchanges Industry
- Max
- 53.68%
- Q3
- 40.45%
- Median
- 31.81%
- Q1
- 24.66%
- Min
- 9.71%
An Operating Profit Margin of 40.63% places MCO in the upper quartile for the Financial - Data & Stock Exchanges industry. This signals a strong ability to translate revenue into operating profit, outperforming most of its competitors in core business efficiency.
Profitability at a Glance
| Symbol | ARCC | MCO |
|---|---|---|
| Return on Equity (TTM) | 11.03% | 56.36% |
| Return on Assets (TTM) | 5.08% | 13.95% |
| Return on Invested Capital (TTM) | 208.60% | 18.31% |
| Net Profit Margin (TTM) | 67.48% | 29.14% |
| Operating Profit Margin (TTM) | 91.13% | 40.63% |
| Gross Profit Margin (TTM) | 95.92% | 69.71% |
Financial Strength
Current Ratio
ARCC
--
Asset Management Industry
- Max
- 12.44
- Q3
- 5.76
- Median
- 3.04
- Q1
- 1.03
- Min
- 0.01
Current Ratio data for ARCC is currently unavailable.
MCO
1.56
Financial - Data & Stock Exchanges Industry
- Max
- 1.60
- Q3
- 1.57
- Median
- 1.06
- Q1
- 0.96
- Min
- 0.62
MCO’s Current Ratio of 1.56 aligns with the median group of the Financial - Data & Stock Exchanges industry, indicating that its short-term liquidity is in line with its sector peers.
Debt-to-Equity Ratio
ARCC
--
Asset Management Industry
- Max
- 2.62
- Q3
- 1.42
- Median
- 0.76
- Q1
- 0.34
- Min
- 0.01
Debt-to-Equity Ratio data for ARCC is currently unavailable.
MCO
1.93
Financial - Data & Stock Exchanges Industry
- Max
- 1.09
- Q3
- 0.80
- Median
- 0.62
- Q1
- 0.36
- Min
- 0.04
With a Debt-to-Equity Ratio of 1.93, MCO operates with exceptionally high leverage compared to the Financial - Data & Stock Exchanges industry norm. This suggests an aggressive reliance on debt financing, which can magnify returns but also significantly elevates financial risk.
Interest Coverage Ratio
ARCC
3.77
Asset Management Industry
- Max
- 13.30
- Q3
- 6.30
- Median
- 2.71
- Q1
- 1.00
- Min
- -6.91
ARCC’s Interest Coverage Ratio of 3.77 is positioned comfortably within the norm for the Asset Management industry, indicating a standard and healthy capacity to cover its interest payments.
MCO
8.64
Financial - Data & Stock Exchanges Industry
- Max
- 27.44
- Q3
- 22.05
- Median
- 10.08
- Q1
- 6.79
- Min
- 1.01
MCO’s Interest Coverage Ratio of 8.64 is positioned comfortably within the norm for the Financial - Data & Stock Exchanges industry, indicating a standard and healthy capacity to cover its interest payments.
Financial Strength at a Glance
| Symbol | ARCC | MCO |
|---|---|---|
| Current Ratio (TTM) | -- | 1.56 |
| Quick Ratio (TTM) | -- | 1.56 |
| Debt-to-Equity Ratio (TTM) | -- | 1.93 |
| Debt-to-Asset Ratio (TTM) | -- | 0.47 |
| Net Debt-to-EBITDA Ratio (TTM) | -0.35 | 1.72 |
| Interest Coverage Ratio (TTM) | 3.77 | 8.64 |
Growth
The following charts compare key year-over-year (YoY) growth metrics for ARCC and MCO. These metrics are based on the companies’ annual financial reports.
Revenue Growth
Earnings Per Share (EPS) Growth
Free Cash Flow Growth
Dividend
Dividend Yield
ARCC
8.57%
Asset Management Industry
- Max
- 26.09%
- Q3
- 11.60%
- Median
- 6.37%
- Q1
- 2.75%
- Min
- 0.00%
ARCC’s Dividend Yield of 8.57% is consistent with its peers in the Asset Management industry, providing a dividend return that is standard for its sector.
MCO
0.71%
Financial - Data & Stock Exchanges Industry
- Max
- 3.86%
- Q3
- 1.44%
- Median
- 1.06%
- Q1
- 0.73%
- Min
- 0.00%
MCO’s Dividend Yield of 0.71% is in the lower quartile for the Financial - Data & Stock Exchanges industry. This suggests the company’s strategy likely favors retaining earnings for growth over providing a high dividend income.
Dividend Payout Ratio
ARCC
81.85%
Asset Management Industry
- Max
- 1,034.88%
- Q3
- 127.70%
- Median
- 75.15%
- Q1
- 34.21%
- Min
- 0.00%
ARCC’s Dividend Payout Ratio of 81.85% is within the typical range for the Asset Management industry, suggesting a balanced approach between shareholder payouts and company reinvestment.
MCO
31.34%
Financial - Data & Stock Exchanges Industry
- Max
- 106.40%
- Q3
- 44.44%
- Median
- 31.97%
- Q1
- 29.26%
- Min
- 0.00%
MCO’s Dividend Payout Ratio of 31.34% is within the typical range for the Financial - Data & Stock Exchanges industry, suggesting a balanced approach between shareholder payouts and company reinvestment.
Dividend at a Glance
| Symbol | ARCC | MCO |
|---|---|---|
| Dividend Yield (TTM) | 8.57% | 0.71% |
| Dividend Payout Ratio (TTM) | 81.85% | 31.34% |
Valuation
Price-to-Earnings Ratio
ARCC
10.53
Asset Management Industry
- Max
- 38.72
- Q3
- 23.40
- Median
- 11.45
- Q1
- 8.80
- Min
- 1.54
ARCC’s P/E Ratio of 10.53 is within the middle range for the Asset Management industry. This suggests its valuation is in line with the sector average, representing neither a significant premium nor a discount compared to its peers.
MCO
43.17
Financial - Data & Stock Exchanges Industry
- Max
- 41.71
- Q3
- 40.17
- Median
- 37.47
- Q1
- 30.61
- Min
- 16.74
At 43.17, MCO’s P/E Ratio is exceptionally high, exceeding the typical maximum for the Financial - Data & Stock Exchanges industry. This suggests the stock may be significantly overvalued compared to its peers and implies high market expectations that could be difficult to meet.
Forward P/E to Growth Ratio
ARCC
-7.92
Asset Management Industry
- Max
- 6.38
- Q3
- 3.23
- Median
- 1.55
- Q1
- 0.89
- Min
- 0.02
ARCC has a negative Forward PEG Ratio of -7.92. This typically results from negative earnings or forecasts of declining future earnings, making the ratio not meaningful for valuation.
MCO
4.70
Financial - Data & Stock Exchanges Industry
- Max
- 4.54
- Q3
- 4.09
- Median
- 4.06
- Q1
- 3.33
- Min
- 2.36
MCO’s Forward PEG Ratio of 4.70 is exceptionally high for the Financial - Data & Stock Exchanges industry. This suggests its stock price is very high relative to its expected earnings growth, signaling significant overvaluation risk.
Price-to-Sales Ratio
ARCC
7.30
Asset Management Industry
- Max
- 13.75
- Q3
- 7.92
- Median
- 4.87
- Q1
- 3.51
- Min
- 0.02
ARCC’s P/S Ratio of 7.30 aligns with the market consensus for the Asset Management industry. This suggests its valuation, based on sales, is seen as standard and is on par with its competitors.
MCO
12.57
Financial - Data & Stock Exchanges Industry
- Max
- 15.75
- Q3
- 12.42
- Median
- 9.37
- Q1
- 6.34
- Min
- 1.69
MCO’s P/S Ratio of 12.57 is in the upper echelon for the Financial - Data & Stock Exchanges industry. This means the company is valued richly on its revenue stream compared to its peers, suggesting the stock is priced for a high level of future performance.
Price-to-Book Ratio
ARCC
1.11
Asset Management Industry
- Max
- 5.33
- Q3
- 2.75
- Median
- 1.06
- Q1
- 0.87
- Min
- 0.00
The P/B Ratio is often not a primary valuation metric for the Asset Management industry.
MCO
24.57
Financial - Data & Stock Exchanges Industry
- Max
- 8.57
- Q3
- 8.05
- Median
- 4.77
- Q1
- 3.69
- Min
- 1.19
At 24.57, MCO’s P/B Ratio is at an extreme premium to the Financial - Data & Stock Exchanges industry. This signifies that the market’s valuation is heavily reliant on future potential rather than its current net asset value, which can be a high-risk proposition.
Valuation at a Glance
| Symbol | ARCC | MCO |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | 10.53 | 43.17 |
| Forward PEG Ratio (TTM) | -7.92 | 4.70 |
| Price-to-Sales Ratio (P/S, TTM) | 7.30 | 12.57 |
| Price-to-Book Ratio (P/B, TTM) | 1.11 | 24.57 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | -6.47 | 36.40 |
| EV-to-EBITDA (TTM) | 8.15 | 32.91 |
| EV-to-Sales (TTM) | 7.00 | 13.27 |