Ares Management Corp. (ARES) — which is rated “B” by our proprietary Weiss Ratings system — is one of my favorite high-yielding investment management plays; it is a top pick for more speculative investors, suggests Mike Larson, editor of Safe Money Report.
Unlike some of the larger asset managers, Ares focuses on “alternative” endeavors. It runs credit funds that help small- and mid-sized companies finance their operations, operates private equity funds to invest in growing firms, and manages capital earmarked for real estate investment.
The firm managed $282 billion as of late 2021. Adjusted net income roughly doubled to $84.7 million, or 45 cents per share, from year-ago levels in the third quarter of 2021. Revenue climbed 53% to $448.3 million.
Strong demand from investors looking to invest in private markets drove the results. Indeed, solid performance and a 57% surge in assets under management boosted management fees and related income by more than 50% YOY.
Now let’s talk yield. Ares Management paid out 47 cents per share in quarterly dividends as of late 2021. That was up more than 17% from a year earlier. It also worked out to an indicated yield of just over 2.3%.
That’s one reason why ARES graduated to the “Buy” Ratings tier in early 2021 after earning mostly “Hold” Ratings in 2020. It makes yet another solid, somewhat more speculative pick for 2022.
