Ares Capital (NASDAQ:ARCC) Posts Earnings Results

Key Points

• Ares Capital reported quarterly earnings of $0.50 per share, which missed analyst expectations by $0.01.
• The company announced a quarterly dividend of $0.48, yielding 8.46% on an annualized basis with a payout ratio of 93.66%.
• Analysts have mixed ratings on Ares Capital, with one sell rating, three hold ratings, five buy ratings, and a consensus rating of "Moderate Buy" with an average target price of $22.21.

Ares Capital (NASDAQ:ARCC - Get Free Report) announced its quarterly earnings data on Tuesday. The investment management company reported $0.50 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.51 by ($0.01), Zacks reports. The business had revenue of $614.00 million during the quarter, compared to the consensus estimate of $748.76 million. Ares Capital had a net margin of 44.94% and a return on equity of 10.63%. During the same period in the previous year, the business posted $0.61 earnings per share.

Ares Capital Trading Up 0.4%

Shares of ARCC traded up $0.09 during trading hours on Wednesday, hitting $22.63. 3,985,531 shares of the stock were exchanged, compared to its average volume of 2,986,838. Ares Capital has a fifty-two week low of $18.26 and a fifty-two week high of $23.84. 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 has a 50-day moving average of $22.22 and a 200-day moving average of $22.05. The firm has a market capitalization of $15.71 billion, a P/E ratio of 11.04 and a beta of 0.67.

Ares Capital Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, September 30th. Stockholders of record on Monday, September 15th will be given a dividend of $0.48 per share. This represents a $1.92 annualized dividend and a dividend yield of 8.48%. The ex-dividend date of this dividend is Monday, September 15th. Ares Capital's dividend payout ratio (DPR) is presently 93.66%.

Wall Street Analyst Weigh In

ARCC has been the topic of several recent analyst reports. Wells Fargo & Company boosted their price objective on shares of Ares Capital from $22.00 to $23.00 and gave the stock an "overweight" rating in a research note on Wednesday. B. Riley raised shares of Ares Capital from a "neutral" rating to a "buy" rating and boosted their price objective for the company from $22.50 to $23.50 in a report on Wednesday. Keefe, Bruyette & Woods boosted their price objective on shares of Ares Capital from $22.00 to $23.00 and gave the company an "outperform" rating in a report on Wednesday. JPMorgan Chase & Co. cut their price target on shares of Ares Capital from $24.50 to $22.00 and set an "overweight" rating for the company in a report on Thursday, April 24th. Finally, UBS Group upped their price objective on shares of Ares Capital from $22.00 to $22.50 and gave the stock a "neutral" rating in a research report on Wednesday, July 16th. One equities research analyst has rated the stock with a sell rating, two have given a hold rating, six have issued a buy rating and one has issued a strong buy rating to the company's stock. According to MarketBeat, the company currently has an average rating of "Moderate Buy" and an average price target of $22.71.

Institutional Investors Weigh In On Ares Capital

Several large investors have recently modified their holdings of ARCC. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC acquired a new stake in shares of Ares Capital during the first quarter worth $14,766,000. Goldman Sachs Group Inc. boosted its stake in 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 acquiring an additional 358,829 shares in the last quarter. Empowered Funds LLC boosted its stake in 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 acquiring an additional 16,128 shares in the last quarter. Dynamic Technology Lab Private Ltd bought a new position in Ares Capital during the first quarter worth $273,000. Finally, AQR Capital Management LLC boosted its stake in 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 acquiring an additional 1,000 shares in the last quarter. 27.38% of the stock is currently owned by institutional investors and hedge funds.

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.