Ares Capital Corporation (NASDAQ:ARCC) to Issue $0.48 Quarterly Dividend

Key Points

• Ares Capital Corporation will pay a quarterly dividend of $0.48 per share on September 30th, leading to an annualized dividend of $1.92 and a dividend yield of 8.46%.
• The company has a dividend payout ratio of 96.0%, which is currently covered by earnings, but could be at risk if earnings decline.
• Ares Capital recently reported $0.50 EPS for the last quarter, missing the consensus estimate, and is expected to earn $2.17 per share next year.

Ares Capital Corporation (NASDAQ:ARCC - Get Free Report) announced a quarterly dividend on Tuesday, July 29th, RTT News reports. Investors of record on Monday, September 15th will be given a dividend of 0.48 per share by the investment management company on Tuesday, September 30th. This represents a $1.92 dividend on an annualized basis and a yield of 8.48%. The ex-dividend date of this dividend is Monday, September 15th.

Ares Capital has a dividend payout ratio of 96.0% indicating that its dividend is currently covered by earnings, but may not be in the future if the company's earnings decline. Research analysts expect Ares Capital to earn $2.17 per share next year, which means the company should continue to be able to cover its $1.92 annual dividend with an expected future payout ratio of 88.5%.

Ares Capital Trading Up 0.4%

Shares of NASDAQ:ARCC traded up $0.09 during trading on Wednesday, reaching $22.63. 3,985,531 shares of the company were exchanged, compared to its average volume of 2,986,838. The company has a debt-to-equity ratio of 1.02, a current ratio of 1.40 and a quick ratio of 1.40. The business's fifty day simple moving average is $22.22 and its 200-day simple moving average is $22.05. Ares Capital has a 12-month low of $18.26 and a 12-month high of $23.84. The firm has a market capitalization of $15.71 billion, a PE ratio of 11.04 and a beta of 0.67.

Ares Capital (NASDAQ:ARCC - Get Free Report) last released its quarterly earnings data on Tuesday, July 29th. The investment management company reported $0.50 earnings per share (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 10.63%. The business had revenue of $614.00 million for the quarter, compared to the consensus estimate of $748.76 million. During the same quarter in the prior year, the business posted $0.61 earnings per share. On average, research analysts anticipate that Ares Capital will post 2.19 EPS for the current year.

Institutional Investors Weigh In On Ares Capital

Institutional investors and hedge funds have recently made changes to their positions in the stock. Dynamic Technology Lab Private Ltd purchased a new position in shares of Ares Capital during the first quarter worth $273,000. AQR Capital Management LLC raised its holdings in shares of Ares Capital by 6.5% during the first quarter. AQR Capital Management LLC now owns 16,502 shares of the investment management company's stock worth $365,000 after purchasing an additional 1,000 shares during the last quarter. Empowered Funds LLC raised its holdings in shares of Ares Capital by 139.9% during the first quarter. Empowered Funds LLC now owns 27,655 shares of the investment management company's stock worth $613,000 after purchasing an additional 16,128 shares during the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC purchased a new position in shares of Ares Capital during the first quarter worth $14,766,000. Finally, Goldman Sachs Group Inc. raised its holdings in shares of Ares Capital by 14.5% during the first quarter. Goldman Sachs Group Inc. now owns 2,835,007 shares of the investment management company's stock worth $62,824,000 after purchasing an additional 358,829 shares during the last quarter. 27.38% of the stock is currently owned by institutional investors and hedge funds.

Wall Street Analysts Forecast Growth

A number of research firms have recently issued reports on ARCC. Keefe, Bruyette & Woods increased their price objective on shares of Ares Capital from $22.00 to $23.00 and gave the company an "outperform" rating in a research note on Wednesday. Wells Fargo & Company raised their target price on shares of Ares Capital from $22.00 to $23.00 and gave the company an "overweight" rating in a research note on Wednesday. UBS Group raised their target price on shares of Ares Capital from $22.00 to $22.50 and gave the company a "neutral" rating in a research note on Wednesday, July 16th. JPMorgan Chase & Co. lowered their target price on shares of Ares Capital from $24.50 to $22.00 and set an "overweight" rating for the company in a research note on Thursday, April 24th. Finally, Royal Bank Of Canada lowered their target price on shares of Ares Capital from $24.00 to $23.00 and set an "outperform" rating for the company in a research note on Tuesday, May 6th. One equities research analyst has rated the stock with a sell rating, two have assigned a hold rating, six have assigned a buy rating and one has issued a strong buy rating to the company's stock. According to MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average target price of $22.71.

Ares Capital Company Profile

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.