“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
A five-year holding period can reveal far more about an investment than short-term price moves. In the case of Ares Management Corp (NYSE: ARES), the last five years delivered a strong total return, with gains driven by both share price appreciation and reinvested dividends. For investors evaluating long-term ARES investment performance, the key question is not simply whether the stock rose, but how the full return profile developed over time.
Ares Management is a large alternative asset manager, and that business model matters when interpreting the stock’s performance. Firms in this category generate earnings from management fees, incentive income, and the expansion of assets under management. As a result, long-term shareholder returns often reflect a combination of business growth, market sentiment toward alternative assets, and cash distributions to shareholders.
ARES 5-Year Return at a Glance
An investor who committed $10,000 to ARES on 07/23/2021 and reinvested dividends would have seen that investment grow to $20,985.32 by 07/22/2026. That represents a total return of 109.83%, or an annualized return of 15.98%.
| Start date: | 07/23/2021 |
|
|||
| End date: | 07/22/2026 | ||||
| Start price/share: | $66.51 | ||||
| End price/share: | $119.57 | ||||
| Starting shares: | 150.35 | ||||
| Ending shares: | 175.49 | ||||
| Dividends reinvested/share: | $17.36 | ||||
| Total return: | 109.83% | ||||
| Average annual return: | 15.98% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $20,985.32 | ||||
The share price itself increased from $66.51 to $119.57 over the period. That capital appreciation was substantial on its own, but it does not tell the full story. The ending share count rose from 150.35 to 175.49 because dividends were reinvested, which means the position compounded through both a higher stock price and a larger ownership stake.
[These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
What Drove the Total Return?
Total return combines two sources of investment performance:
- Capital appreciation: the increase in ARES shares from $66.51 to $119.57.
- Dividend income: cash distributions that, when reinvested, increased the number of shares owned.
Over the five-year period, Ares Management paid a total of $17.36 per share in dividends. Reinvestment converted those cash payments into additional shares, raising the ending share count by more than 25 shares. That compounding effect is especially important in long holding periods, because each reinvested dividend can itself begin generating future dividends.
Yield, Income, and Yield on Cost
Based on the most recent annualized dividend rate of $5.4 per share, ARES has a current yield of approximately 4.52% using the ending share price of $119.57. For income-focused analysis, yield on cost adds another useful perspective.
Yield on cost measures the current annualized dividend against the original purchase price rather than the current market price. Using the same $5.4 annualized dividend rate and the original purchase price of $66.51, the yield on cost works out to 6.80%.
In practical terms:
- Current yield shows what a new buyer would earn at today’s price.
- Yield on cost shows how the income stream has grown relative to the initial entry price.
Why the Result Matters
A 109.83% total return over five years is notable because it reflects more than a favorable market backdrop. It suggests that Ares Management combined business execution with a shareholder return profile that benefited from both price appreciation and recurring cash distributions. For asset managers, sustained performance often depends on maintaining fee-earning assets, expanding product reach, and navigating changing credit and capital market conditions. Strong historical returns do not isolate which factor mattered most, but they do indicate that the company created meaningful shareholder value over this period.
Five-year return analysis is also useful because it reduces the noise of short-term volatility. ARES shares, like most financial stocks, do not move in a straight line. A longer measurement period makes it easier to assess whether the business translated operating momentum into durable equity returns.
Key Takeaways
- $10,000 invested in ARES on 07/23/2021 grew to $20,985.32 by 07/22/2026.
- Total return was 109.83% with dividends reinvested.
- The annualized return was 15.98%.
- Dividends contributed meaningfully, increasing share ownership from 150.35 to 175.49 shares.
- At an annualized dividend rate of $5.4 per share, the current yield is approximately 4.52% and yield on cost is 6.80%.
“It’s not always easy to do what’s not popular, but that’s where you make your money. Buy stocks that look bad to less careful investors and hang on until their real value is recognized.” — John Neff
