Ares Capital Corporation (NASDAQ:ARCC) Receives Average Recommendation of "Moderate Buy" from Brokerages

Key Points

• Ares Capital has a “Moderate Buy” consensus rating from 11 analysts, with eight buys and three holds; the average 12-month price target is $20.60.
• The company reported quarterly EPS of $0.47, matching estimates, while revenue of $768 million was slightly below the $770.19 million consensus.
• Ares Capital declared a quarterly dividend of $0.48 per share, or $1.92 annualized, representing a 9.7% yield; its payout ratio is 142.22%.

Ares Capital Corporation (NASDAQ:ARCC - Get Free Report) has received a consensus rating of "Moderate Buy" from the eleven research firms that are covering the company, Marketbeat reports. Three equities research analysts have rated the stock with a hold rating and eight have issued a buy rating on the company. The average twelve-month price target among brokers that have issued ratings on the stock in the last year is $20.60.

Several brokerages have recently issued reports on ARCC. Wall Street Zen downgraded Ares Capital from a "hold" rating to a "sell" rating in a research report on Sunday, August 2nd. Wells Fargo & Company restated an "equal weight" rating and issued a $19.00 target price (down from $20.00) on shares of Ares Capital in a research report on Friday, June 12th. UBS Group lifted their target price on Ares Capital from $19.00 to $21.00 and gave the company a "neutral" rating in a research note on Tuesday, September 1st. Keefe, Bruyette & Woods reduced their price target on Ares Capital from $21.00 to $20.00 and set an "outperform" rating for the company in a research report on Thursday, July 30th. Finally, Weiss Ratings reissued a "hold (c)" rating on shares of Ares Capital in a research note on Friday, September 4th.

Ares Capital Price Performance

Shares of NASDAQ ARCC opened at $19.74 on Friday. Ares Capital has a 1-year low of $17.40 and a 1-year high of $22.50. The company has a debt-to-equity ratio of 1.14, a current ratio of 1.28 and a quick ratio of 1.28. The business's fifty day moving average price is $19.42 and its two-hundred day moving average price is $18.87. The firm has a market capitalization of $14.17 billion, a PE ratio of 14.62 and a beta of 0.57.

Ares Capital (NASDAQ:ARCC - Get Free Report) last announced its quarterly earnings results on Wednesday, July 29th. The investment management company reported $0.47 earnings per share (EPS) for the quarter, meeting the consensus estimate of $0.47. Ares Capital had a net margin of 30.91% and a return on equity of 9.80%. The company had revenue of $768.00 million during the quarter, compared to the consensus estimate of $770.19 million. During the same quarter in the previous year, the company posted $0.50 earnings per share. On average, research analysts expect that Ares Capital will post 1.91 EPS for the current year.

Ares Capital Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, September 30th. Investors of record on Tuesday, September 15th will be paid a dividend of $0.48 per share. This represents a $1.92 dividend on an annualized basis and a dividend yield of 9.7%. The ex-dividend date is Tuesday, September 15th. Ares Capital's payout ratio is currently 142.22%.

Hedge Funds Weigh In On Ares Capital

A number of institutional investors and hedge funds have recently bought and sold shares of the stock. Strs Ohio bought a new position in shares of Ares Capital in the first quarter valued at approximately $189,210,000. Bank of America Corp DE bought a new stake in Ares Capital during the second quarter worth approximately $165,569,000. Legal & General Group Plc acquired a new stake in Ares Capital in the second quarter worth approximately $120,538,000. Advisors Capital Management LLC acquired a new stake in Ares Capital in the second quarter worth approximately $63,140,000. Finally, OMERS ADMINISTRATION Corp acquired a new stake in Ares Capital in the second quarter worth approximately $53,867,000. Institutional investors own 27.38% of the company's stock.

About Ares Capital

Ares Capital Corporation NASDAQ: ARCC is a business development company that provides financing to middle-market companies. The company invests primarily in privately originated loans and other debt investments, helping businesses fund acquisitions, recapitalizations, refinancings, growth initiatives and other corporate purposes.

Its investment portfolio generally includes senior secured loans, subordinated debt and mezzanine financing, along with selected equity investments. Ares Capital focuses on companies with established operations across a variety of industries and typically works with private equity sponsors, management teams and other financial partners.

Founded in 2004, Ares Capital is externally managed by Ares Capital Management LLC, an affiliate of global alternative investment manager Ares Management Corporation.

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