Bank of America Corp DE Acquires 1,259,230 Shares of Ares Capital Corporation $ARCC

Key Points

• Bank of America increased its Ares Capital stake by 16% in the first quarter, purchasing 1.26 million shares to own 9.14 million shares valued at approximately $164.6 million. Institutional investors collectively own 27.38% of ARCC.
• Ares Capital reported quarterly earnings of $0.47 per share, matching analyst expectations, while revenue of $768 million fell slightly short of consensus estimates.
• The company declared a quarterly dividend of $0.48 per share, equivalent to $1.92 annually and a 9.9% yield. Analysts maintain a “Moderate Buy” consensus with an average price target of $20.40, despite several recent target reductions.

Bank of America Corp DE raised its holdings in shares of Ares Capital Corporation (NASDAQ:ARCC - Free Report) by 16.0% in the 1st quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The fund owned 9,135,454 shares of the investment management company's stock after purchasing an additional 1,259,230 shares during the quarter. Bank of America Corp DE owned approximately 1.27% of Ares Capital worth $164,621,000 at the end of the most recent reporting period.

Other hedge funds and other institutional investors have also recently added to or reduced their stakes in the company. Arkadios Wealth Advisors raised its position in shares of Ares Capital by 26.2% in the first quarter. Arkadios Wealth Advisors now owns 165,222 shares of the investment management company's stock valued at $2,977,000 after purchasing an additional 34,322 shares during the period. Sunbelt Securities Inc. lifted its position in Ares Capital by 37.4% during the first quarter. Sunbelt Securities Inc. now owns 228,982 shares of the investment management company's stock worth $4,126,000 after acquiring an additional 62,352 shares during the last quarter. Rivernorth Capital Management LLC acquired a new stake in Ares Capital during the first quarter worth approximately $5,754,000. Empowered Funds LLC boosted its holdings in shares of Ares Capital by 101.4% during the first quarter. Empowered Funds LLC now owns 78,137 shares of the investment management company's stock worth $1,408,000 after acquiring an additional 39,334 shares during the period. Finally, Enstar Group LTD boosted its holdings in shares of Ares Capital by 2.4% during the first quarter. Enstar Group LTD now owns 363,351 shares of the investment management company's stock worth $6,548,000 after acquiring an additional 8,396 shares during the period. 27.38% of the stock is owned by institutional investors.

Ares Capital Price Performance

Ares Capital stock opened at $19.32 on Thursday. The stock's fifty day moving average price is $18.71 and its two-hundred day moving average price is $18.86. Ares Capital Corporation has a one year low of $17.40 and a one year high of $22.76. 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 firm has a market cap of $13.87 billion, a PE ratio of 14.31 and a beta of 0.56.

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

Ares Capital Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, September 30th. Investors of record on Tuesday, September 15th will be given a dividend of $0.48 per share. The ex-dividend date of this dividend is Tuesday, September 15th. This represents a $1.92 annualized dividend and a yield of 9.9%. Ares Capital's dividend payout ratio is currently 142.22%.

Analysts Set New Price Targets

Several equities analysts have recently commented on ARCC shares. Weiss Ratings reaffirmed a "hold (c)" rating on shares of Ares Capital in a research report on Tuesday, June 9th. Royal Bank Of Canada reduced their price target on Ares Capital from $22.00 to $21.00 and set an "outperform" rating for the company in a research note on Wednesday, April 29th. JPMorgan Chase & Co. decreased their price objective on Ares Capital from $19.00 to $18.50 and set an "overweight" rating on the stock in a report on Thursday, July 2nd. Wall Street Zen cut Ares Capital from a "hold" rating to a "sell" rating in a research report on Sunday. Finally, Wells Fargo & Company reiterated an "equal weight" rating and set a $19.00 price objective (down from $20.00) on shares of Ares Capital in a research report on Friday, June 12th. Eight research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the stock. Based on data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $20.40.

Ares Capital Company 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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