ARCC vs. XP: A Head-to-Head Stock Comparison
Updated onHere’s a clear look at ARCC and XP, comparing key factors like historical performance, profitability, financial strength, growth, dividend, and valuation.
Company Overview
ARCC’s market capitalization stands at 15.56 billion USD, while XP’s is 10.43 billion USD, indicating their market valuations are broadly comparable.
XP carries a higher beta at 1.17, indicating it’s more sensitive to market moves, while ARCC (beta: 0.73) exhibits greater stability.
| Symbol | ARCC | XP |
|---|---|---|
| Company Name | Ares Capital Corporation | XP Inc. |
| Country | US | BR |
| Sector | Financial Services | Financial Services |
| Industry | Asset Management | Financial - Capital Markets |
| CEO | Kort Schnabel | Thiago Maffra |
| Price | 22.41 USD | 19.8 USD |
| Market Cap | 15.56 billion USD | 10.43 billion USD |
| Beta | 0.73 | 1.17 |
| Exchange | NASDAQ | NASDAQ |
| IPO Date | October 5, 2004 | December 11, 2019 |
| ADR | No | No |
Historical Performance
This chart compares the performance of ARCC and XP 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.
XP
22.91%
Financial - Capital Markets Industry
- Max
- 42.02%
- Q3
- 20.69%
- Median
- 13.73%
- Q1
- 3.33%
- Min
- -21.32%
In the upper quartile for the Financial - Capital Markets industry, XP’s Return on Equity of 22.91% signals a highly effective use of shareholder capital to drive profitability compared to most of its peers.
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.
XP
-1.71%
Financial - Capital Markets Industry
- Max
- 30.24%
- Q3
- 13.34%
- Median
- 6.20%
- Q1
- -1.71%
- Min
- -16.91%
Return on Invested Capital is often not a primary measure of capital efficiency in the Financial - Capital Markets industry.
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.
XP
63.34%
Financial - Capital Markets Industry
- Max
- 28.67%
- Q3
- 13.52%
- Median
- 10.47%
- Q1
- 0.24%
- Min
- -9.55%
XP’s Net Profit Margin of 63.34% is exceptionally high, placing it well beyond the typical range for the Financial - Capital Markets industry. This demonstrates outstanding operational efficiency and a strong competitive advantage in converting revenue into profit.
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.
XP
-53.85%
Financial - Capital Markets Industry
- Max
- 56.86%
- Q3
- 25.29%
- Median
- 15.90%
- Q1
- 0.51%
- Min
- -19.18%
XP has a negative Operating Profit Margin of -53.85%. This signifies the company is unprofitable at the operational level, as its core business expenses exceed its revenue.
Profitability at a Glance
| Symbol | ARCC | XP |
|---|---|---|
| Return on Equity (TTM) | 11.03% | 22.91% |
| Return on Assets (TTM) | 5.08% | 1.35% |
| Return on Invested Capital (TTM) | 208.60% | -1.71% |
| Net Profit Margin (TTM) | 67.48% | 63.34% |
| Operating Profit Margin (TTM) | 91.13% | -53.85% |
| Gross Profit Margin (TTM) | 95.92% | 30.86% |
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.
XP
0.57
Financial - Capital Markets Industry
- Max
- 4.60
- Q3
- 3.24
- Median
- 1.32
- Q1
- 0.96
- Min
- 0.05
For the Financial - Capital Markets industry, the Current Ratio is often not the most suitable measure of short-term liquidity.
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.
XP
2.75
Financial - Capital Markets Industry
- Max
- 3.63
- Q3
- 1.68
- Median
- 0.37
- Q1
- 0.09
- Min
- 0.00
XP’s leverage is in the upper quartile of the Financial - Capital Markets industry, with a Debt-to-Equity Ratio of 2.75. While this approach can boost equity growth, it also exposes the company to greater financial vulnerability.
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.
XP
-5.17
Financial - Capital Markets Industry
- Max
- 12.71
- Q3
- 7.94
- Median
- 1.92
- Q1
- 0.24
- Min
- -7.71
The Interest Coverage Ratio is often not a primary indicator of debt servicing capacity in the Financial - Capital Markets industry.
Financial Strength at a Glance
| Symbol | ARCC | XP |
|---|---|---|
| Current Ratio (TTM) | -- | 0.57 |
| Quick Ratio (TTM) | -- | 0.57 |
| Debt-to-Equity Ratio (TTM) | -- | 2.75 |
| Debt-to-Asset Ratio (TTM) | -- | 0.17 |
| Net Debt-to-EBITDA Ratio (TTM) | -0.35 | 8.10 |
| Interest Coverage Ratio (TTM) | 3.77 | -5.17 |
Growth
The following charts compare key year-over-year (YoY) growth metrics for ARCC and XP. 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.
XP
3.28%
Financial - Capital Markets Industry
- Max
- 5.86%
- Q3
- 1.74%
- Median
- 0.79%
- Q1
- 0.00%
- Min
- 0.00%
With a Dividend Yield of 3.28%, XP offers a more attractive income stream than most of its peers in the Financial - Capital Markets industry, signaling a strong commitment to shareholder returns.
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.
XP
43.17%
Financial - Capital Markets Industry
- Max
- 128.06%
- Q3
- 43.11%
- Median
- 12.56%
- Q1
- 0.00%
- Min
- 0.00%
XP’s Dividend Payout Ratio of 43.17% is in the upper quartile for the Financial - Capital Markets industry. This indicates a strong commitment to shareholder returns but also suggests that a smaller portion of earnings is retained for reinvestment compared to many peers.
Dividend at a Glance
| Symbol | ARCC | XP |
|---|---|---|
| Dividend Yield (TTM) | 8.57% | 3.28% |
| Dividend Payout Ratio (TTM) | 81.85% | 43.17% |
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.
XP
12.27
Financial - Capital Markets Industry
- Max
- 42.65
- Q3
- 29.09
- Median
- 20.52
- Q1
- 14.58
- Min
- 8.28
In the lower quartile for the Financial - Capital Markets industry, XP’s P/E Ratio of 12.27 suggests the stock may be undervalued compared to its peers, potentially presenting an attractive entry point for investors.
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.
XP
-0.12
Financial - Capital Markets Industry
- Max
- 4.05
- Q3
- 2.46
- Median
- 1.52
- Q1
- 0.78
- Min
- 0.02
XP has a negative Forward PEG Ratio of -0.12. This typically results from negative earnings or forecasts of declining future earnings, making the ratio not meaningful for valuation.
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.
XP
7.59
Financial - Capital Markets Industry
- Max
- 14.34
- Q3
- 7.63
- Median
- 2.98
- Q1
- 1.50
- Min
- 0.04
The P/S Ratio is often not a primary valuation tool in the Financial - Capital Markets industry.
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.
XP
2.75
Financial - Capital Markets Industry
- Max
- 9.60
- Q3
- 6.00
- Median
- 2.91
- Q1
- 1.84
- Min
- 0.53
XP’s P/B Ratio of 2.75 is within the conventional range for the Financial - Capital Markets industry. This shows a balanced market view, where the stock’s price is neither at a significant premium nor a discount to the book value of its peers.
Valuation at a Glance
| Symbol | ARCC | XP |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | 10.53 | 12.27 |
| Forward PEG Ratio (TTM) | -7.92 | -0.12 |
| Price-to-Sales Ratio (P/S, TTM) | 7.30 | 7.59 |
| Price-to-Book Ratio (P/B, TTM) | 1.11 | 2.75 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | -6.47 | 4.86 |
| EV-to-EBITDA (TTM) | 8.15 | 17.32 |
| EV-to-Sales (TTM) | 7.00 | 14.26 |