Ares Capital Corporation $ARCC Shares Bought by Tectonic Advisors LLC

Key Points

• Tectonic Advisors LLC raised its stake in Ares Capital by 10.8% to 662,533 shares—worth about $13.4 million—according to the latest 13F filing.
• Ares Capital pays a quarterly dividend of $0.48 (annualized $1.92) for a 10.6% yield, but the payout ratio is 103.23%, which could raise sustainability concerns.
• Insiders increased holdings recently: CEO Michael Kort Schnabel bought 12,500 shares (a 44.6% increase in his stake) and CFO Scott C. Lem bought 5,186 shares (a 15.1% increase), signaling management buy-in at ~\$19 per share.

Tectonic Advisors LLC raised its stake in Ares Capital Corporation (NASDAQ:ARCC - Free Report) by 10.8% in the fourth quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The firm owned 662,533 shares of the investment management company's stock after acquiring an additional 64,491 shares during the quarter. Tectonic Advisors LLC owned approximately 0.09% of Ares Capital worth $13,403,000 at the end of the most recent reporting period.

A number of other large investors also recently bought and sold shares of the stock. Canal Capital Management LLC lifted its holdings in Ares Capital by 1.6% in the fourth quarter. Canal Capital Management LLC now owns 32,955 shares of the investment management company's stock valued at $667,000 after acquiring an additional 520 shares during the period. BKM Wealth Management LLC lifted its holdings in Ares Capital by 1.3% in the third quarter. BKM Wealth Management LLC now owns 42,394 shares of the investment management company's stock valued at $865,000 after acquiring an additional 525 shares during the period. FSC Wealth Advisors LLC raised its stake in shares of Ares Capital by 10.0% during the 2nd quarter. FSC Wealth Advisors LLC now owns 5,830 shares of the investment management company's stock worth $128,000 after buying an additional 530 shares during the period. Perigon Wealth Management LLC raised its stake in shares of Ares Capital by 1.6% during the 4th quarter. Perigon Wealth Management LLC now owns 34,700 shares of the investment management company's stock worth $702,000 after buying an additional 547 shares during the period. Finally, Balboa Wealth Partners raised its stake in shares of Ares Capital by 1.3% during the 3rd quarter. Balboa Wealth Partners now owns 44,755 shares of the investment management company's stock worth $913,000 after buying an additional 559 shares during the period. 27.38% of the stock is owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In

Several research analysts have recently weighed in on the company. 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 note on Friday, March 13th. 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 note on Thursday, February 5th. JPMorgan Chase & Co. reduced their target price on Ares Capital from $22.00 to $19.00 and set an "overweight" rating for the company in a research note on Friday, March 13th. Wall Street Zen downgraded Ares Capital from a "hold" rating to a "sell" rating in a research note on Saturday, February 7th. Finally, 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 note on Monday, February 9th. Seven investment analysts have rated the stock with a Buy rating and two have given a Hold rating to the company. According to MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $21.38.

Ares Capital Price Performance

Shares of NASDAQ:ARCC opened at $18.09 on Monday. The company has a quick ratio of 1.70, a current ratio of 1.70 and a debt-to-equity ratio of 1.12. The business has a fifty day moving average of $18.67 and a two-hundred day moving average of $19.71. The stock has a market cap of $12.99 billion, a P/E ratio of 9.73 and a beta of 0.58. Ares Capital Corporation has a 52-week low of $17.40 and a 52-week high of $23.42.

Ares Capital (NASDAQ:ARCC - Get Free Report) last issued its earnings results on Wednesday, February 4th. The investment management company reported $0.50 earnings per share (EPS) for the quarter, meeting the consensus estimate of $0.50. The company 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%.The firm's quarterly revenue was up 4.5% on a year-over-year basis. During the same period in the prior year, the business earned $0.55 EPS. On average, research analysts expect that Ares Capital Corporation will post 2.19 earnings per share for the current year.

Ares Capital Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Tuesday, March 31st. Shareholders of record on Friday, March 13th were issued a $0.48 dividend. This represents a $1.92 annualized dividend and a yield of 10.6%. The ex-dividend date was Friday, March 13th. Ares Capital's dividend payout ratio is presently 103.23%.

Insider Buying and Selling at Ares Capital

In related news, CEO Michael Kort Schnabel bought 12,500 shares of the company's stock in a transaction on Thursday, February 5th. The stock was bought at an average cost of $19.13 per share, for a total transaction of $239,125.00. Following the acquisition, the chief executive officer directly owned 40,500 shares in the company, valued at $774,765. This represents a 44.64% increase in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. Also, CFO Scott C. Lem bought 5,186 shares of the company's stock in a transaction on Friday, February 6th. The stock was bought at an average price 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 in the company, valued at $761,241.27. This represents a 15.13% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. 0.49% of the stock is owned by corporate insiders.

Ares Capital Profile

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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