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

Key Points

• Ares Capital Corporation has received a consensus recommendation of "Moderate Buy" from analysts, with seven analysts suggesting a buy and two recommending a hold.
• The average 12-month price target for the stock among analysts is $22.8571, with some significant price target boosts from various firms recently.
• Ares Capital's most recent earnings report showed an EPS of $0.50, slightly below the consensus estimate, and the company announced a quarterly dividend of $0.48 with a yield of 8.6%.

Ares Capital Corporation (NASDAQ:ARCC - Get Free Report) has been assigned an average recommendation of "Moderate Buy" from the nine analysts that are covering the company, Marketbeat Ratings reports. Two investment analysts have rated the stock with a hold recommendation and seven have assigned a buy recommendation to the company. The average 1-year price objective among brokerages that have covered the stock in the last year is $22.8571.

ARCC has been the topic of a number of research reports. B. Riley raised shares of Ares Capital from a "neutral" rating to a "buy" rating and upped their price target for the stock from $22.50 to $23.50 in a research note on Wednesday, July 30th. JMP Securities set a $23.00 price target on Ares Capital and gave the stock a "market outperform" rating in a research note on Thursday, July 31st. Wall Street Zen raised Ares Capital from a "sell" rating to a "hold" rating in a research note on Saturday, August 16th. Keefe, Bruyette & Woods increased their target price on shares of Ares Capital from $22.00 to $23.00 and gave the stock an "outperform" rating in a research report on Wednesday, July 30th. Finally, UBS Group lifted their price target on shares of Ares Capital from $22.00 to $22.50 and gave the company a "neutral" rating in a research report on Wednesday, July 16th.

Ares Capital Stock Up 0.3%

Shares of ARCC traded up $0.07 during trading hours on Tuesday, reaching $22.44. The company's stock had a trading volume of 3,403,286 shares, compared to its average volume of 2,980,822. The company has a quick ratio of 1.14, a current ratio of 1.14 and a debt-to-equity ratio of 1.01. The firm has a market cap of $15.83 billion, a price-to-earnings ratio of 10.95 and a beta of 0.70. The company has a 50 day moving average of $22.53 and a two-hundred day moving average of $21.90. Ares Capital has a 1-year low of $18.26 and a 1-year high of $23.84.

Ares Capital (NASDAQ:ARCC - Get Free Report) last announced its quarterly earnings data on Tuesday, July 29th. The investment management company reported $0.50 EPS for the quarter, missing analysts' consensus estimates of $0.51 by ($0.01). Ares Capital had a net margin of 44.94% and a return on equity of 10.48%. The company had revenue of $614.00 million for the quarter, compared to analysts' expectations of $748.76 million. During the same period in the previous year, the firm posted $0.61 earnings per share. As a group, research analysts predict that Ares Capital will post 2.19 EPS for the current fiscal year.

Ares Capital Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, September 30th. Stockholders of record on Monday, September 15th will be issued a dividend of $0.48 per share. The ex-dividend date is Monday, September 15th. This represents a $1.92 dividend on an annualized basis and a dividend yield of 8.6%. Ares Capital's payout ratio is 93.66%.

Institutional Trading of Ares Capital

A number of hedge funds have recently bought and sold shares of the stock. Aurora Private Wealth Inc. increased its holdings in shares of Ares Capital by 1.5% during the 2nd quarter. Aurora Private Wealth Inc. now owns 28,983 shares of the investment management company's stock worth $636,000 after purchasing an additional 436 shares during the period. Community Trust & Investment Co. lifted its stake in Ares Capital by 0.3% during the second quarter. Community Trust & Investment Co. now owns 150,072 shares of the investment management company's stock worth $3,296,000 after purchasing an additional 454 shares during the period. Prostatis Group LLC boosted its holdings in Ares Capital by 2.1% during the first quarter. Prostatis Group LLC now owns 21,768 shares of the investment management company's stock valued at $482,000 after purchasing an additional 457 shares in the last quarter. BankPlus Wealth Management LLC grew its stake in shares of Ares Capital by 2.5% in the 1st quarter. BankPlus Wealth Management LLC now owns 19,809 shares of the investment management company's stock valued at $439,000 after purchasing an additional 492 shares during the period. Finally, Fountainhead AM LLC raised its holdings in shares of Ares Capital by 5.5% in the 2nd quarter. Fountainhead AM LLC now owns 9,728 shares of the investment management company's stock worth $214,000 after buying an additional 511 shares in the last quarter. 27.38% of the stock is owned by institutional investors.

About Ares Capital

Ares Capital Corporation is a business development company specializing in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle market companies. It also makes growth capital and general refinancing. It prefers to make investments in companies engaged in the basic and growth manufacturing, business services, consumer products, health care products and services, and information technology service sectors.