Ares Capital Corporation (NASDAQ:ARCC) Receives Average Rating of "Moderate Buy" from Analysts

Key Points

• Ares Capital has an average analyst recommendation of Moderate Buy from nine firms (seven buys, two holds) with a 12‑month average target price of $21.38.
• Company insiders increased exposure in early February: CEO Michael Kort Schnabel bought 12,500 shares at about $19.13 and CFO Scott C. Lem bought 5,186 shares, leaving insiders with 0.49% ownership.
• Ares pays a quarterly dividend of $0.48 (annualized $1.92) for a 10.3% yield and a 103% payout ratio; latest quarter showed $0.50 EPS (in line) and $793M revenue (slightly under expectations), with the stock trading near $18.63 and a P/E around 10.

Shares of Ares Capital Corporation (NASDAQ:ARCC - Get Free Report) have earned an average recommendation of "Moderate Buy" from the nine ratings firms that are presently covering the firm, MarketBeat Ratings reports. Two research analysts have rated the stock with a hold rating and seven have given a buy rating to the company. The average 12 month target price among brokers that have issued a report on the stock in the last year is $21.3750.

Several research analysts recently commented on the company. Weiss Ratings reaffirmed a "hold (c+)" rating on shares of Ares Capital in a research report on Monday, December 29th. Wells Fargo & Company reduced their target price on Ares Capital from $21.00 to $20.00 and set an "overweight" rating for the company in a research report on Thursday, February 5th. UBS Group reduced their target price on Ares Capital from $21.00 to $19.00 and set a "neutral" rating for the company in a research report on Friday, March 13th. Royal Bank Of Canada reduced their target price on Ares Capital from $23.00 to $22.00 and set an "outperform" rating for the company in a research report on Monday, February 9th. Finally, B. Riley Financial reissued a "buy" rating on shares of Ares Capital in a report on Monday, February 9th.

Insiders Place Their Bets

In related news, CEO Michael Kort Schnabel acquired 12,500 shares of the business's stock in a transaction on Thursday, February 5th. The stock was bought at an average cost of $19.13 per share, with a total value of $239,125.00. Following the completion of the acquisition, the chief executive officer owned 40,500 shares in the company, valued at $774,765. The trade was a 44.64% increase in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, CFO Scott C. Lem acquired 5,186 shares of the business's stock in a transaction on Friday, February 6th. The shares were bought at an average cost of $19.29 per share, with a total value of $100,037.94. Following the completion of the acquisition, the chief financial officer owned 39,463 shares of the company's stock, valued at approximately $761,241.27. This trade represents a 15.13% increase in their position. The SEC filing for this purchase provides additional information. 0.49% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently made changes to their positions in ARCC. Partners Group Holding AG increased its stake in shares of Ares Capital by 4.8% in the third quarter. Partners Group Holding AG now owns 1,767,154 shares of the investment management company's stock valued at $36,068,000 after buying an additional 80,885 shares in the last quarter. International Assets Investment Management LLC increased its stake in shares of Ares Capital by 33.9% in the third quarter. International Assets Investment Management LLC now owns 275,891 shares of the investment management company's stock valued at $5,557,000 after buying an additional 69,844 shares in the last quarter. Investment Partners Asset Management Inc. acquired a new stake in shares of Ares Capital in the fourth quarter valued at $1,314,000. Prevail Innovative Wealth Advisors LLC acquired a new stake in shares of Ares Capital in the third quarter valued at $1,430,000. Finally, Sound Income Strategies LLC increased its stake in shares of Ares Capital by 5.6% in the fourth quarter. Sound Income Strategies LLC now owns 2,616,789 shares of the investment management company's stock valued at $54,691,000 after buying an additional 138,857 shares in the last quarter. 27.38% of the stock is owned by institutional investors.

Ares Capital Stock Up 2.4%

ARCC opened at $18.63 on Wednesday. Ares Capital has a 1-year low of $17.40 and a 1-year high of $23.42. The company has a current ratio of 1.70, a quick ratio of 1.70 and a debt-to-equity ratio of 1.12. The stock has a market capitalization of $13.38 billion, a price-to-earnings ratio of 10.02 and a beta of 0.58. The business has a 50 day moving average of $18.63 and a 200-day moving average of $19.69.

Ares Capital (NASDAQ:ARCC - Get Free Report) last issued its earnings results on Wednesday, February 4th. The investment management company reported $0.50 EPS for the quarter, hitting the consensus estimate of $0.50. The firm had revenue of $793.00 million during the quarter, compared to analysts' expectations of $795.20 million. Ares Capital had a return on equity of 9.89% and a net margin of 42.56%.Ares Capital's quarterly revenue was up 4.5% compared to the same quarter last year. During the same period last year, the business earned $0.55 earnings per share. As a group, sell-side analysts anticipate that Ares Capital will post 2.19 earnings per share for the current year.

Ares Capital Dividend Announcement

The business also recently disclosed a quarterly dividend, which was paid on Tuesday, March 31st. Shareholders of record on Friday, March 13th were issued a dividend of $0.48 per share. The ex-dividend date of this dividend was Friday, March 13th. This represents a $1.92 dividend on an annualized basis and a dividend yield of 10.3%. Ares Capital's dividend payout ratio (DPR) is presently 103.23%.

About Ares Capital

Ares Capital Corporation NASDAQ: ARCC is a publicly traded business development company (BDC) that specializes in providing debt and equity financing solutions to U.S. middle-market companies. As a BDC, Ares Capital offers investors access to a diversified portfolio of tailored credit investments, including senior secured loans, unitranche financing, mezzanine debt and equity co-investments. The firm's flexible capital structures are designed to support companies seeking growth capital, refinancing or strategic acquisitions.

Through its credit platform, Ares Capital focuses on originations, underwriting and portfolio management across a range of industries, with a particular emphasis on sectors such as healthcare, technology, industrials and business services.

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