Bank of America Corp DE Invests $165.57 Million in Ares Capital Corporation $ARCC

Key Points

• Bank of America invested $165.57 million in Ares Capital during the second quarter, acquiring 8.94 million shares and an approximately 1.24% stake. Institutional investors collectively own 27.38% of ARCC.
• Ares Capital reported quarterly EPS of $0.47, in line with analyst expectations, while revenue of $768 million came in slightly below estimates. EPS declined from $0.50 in the same period last year.
• The company declared a quarterly dividend of $0.48, equivalent to $1.92 annually and a 9.8% yield. Analysts maintain a “Moderate Buy” consensus with an average price target of $20.60, though some firms recently lowered their targets or ratings.

Bank of America Corp DE purchased a new stake in Ares Capital Corporation (NASDAQ:ARCC - Free Report) in the second quarter, according to its most recent filing with the Securities and Exchange Commission. The institutional investor purchased 8,935,191 shares of the investment management company's stock, valued at approximately $165,569,000. Bank of America Corp DE owned about 1.24% of Ares Capital as of its most recent filing with the Securities and Exchange Commission.

Other hedge funds also recently modified their holdings of the company. Focus Partners Advisor Solutions LLC acquired a new position in shares of Ares Capital during the second quarter worth $747,000. Foresight Capital Management Advisors Inc. increased its holdings in Ares Capital by 17.2% in the second quarter. Foresight Capital Management Advisors Inc. now owns 345,778 shares of the investment management company's stock valued at $6,407,000 after purchasing an additional 50,624 shares during the period. Bank of New York Mellon Corp raised its position in Ares Capital by 53.5% during the 1st quarter. Bank of New York Mellon Corp now owns 240,483 shares of the investment management company's stock worth $4,333,000 after purchasing an additional 83,841 shares during the last quarter. Spinnaker Trust raised its position in Ares Capital by 17.0% during the 4th quarter. Spinnaker Trust now owns 1,210,941 shares of the investment management company's stock worth $24,497,000 after purchasing an additional 176,040 shares during the last quarter. Finally, Plan Group Financial LLC acquired a new position in Ares Capital during the 2nd quarter worth about $2,724,000. Institutional investors and hedge funds own 27.38% of the company's stock.

Ares Capital Stock Performance

Shares of ARCC opened at $19.65 on Friday. Ares Capital Corporation has a one year low of $17.40 and a one year high of $21.64. The company has a market cap of $14.11 billion, a PE ratio of 14.56 and a beta of 0.57. The stock has a 50-day moving average of $19.50 and a 200-day moving average of $18.88. The company has a debt-to-equity ratio of 1.14, a current ratio of 1.28 and a quick ratio of 1.28.

Ares Capital (NASDAQ:ARCC - Get Free Report) last posted its quarterly earnings results on Wednesday, July 29th. The investment management company reported $0.47 earnings per share for the quarter, hitting analysts' consensus estimates of $0.47. The business had revenue of $768.00 million for 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 business earned $0.50 EPS. On average, equities research analysts predict that Ares Capital Corporation will post 1.91 EPS for the current fiscal year.

Ares Capital Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, September 30th. Investors of record on Tuesday, September 15th will be given a $0.48 dividend. The ex-dividend date of this dividend is Tuesday, September 15th. This represents a $1.92 annualized dividend and a yield of 9.8%. Ares Capital's dividend payout ratio (DPR) is presently 142.22%.

Key Ares Capital News

Here are the key news stories impacting Ares Capital this week:

• Positive Sentiment: An investment analysis describes Ares Capital as an attractive high-yield opportunity available around book value. The article’s bullish thesis is supported by ARCC’s substantial dividend yield and its position as one of the largest business development companies. Ares Capital: I'm Buying This 9.7% Yield At Book Value
• Positive Sentiment: Income-investing coverage includes ARCC among high-yield stocks that can help generate meaningful passive income. This reinforces demand from investors seeking cash distributions that are less dependent on market direction. It Only Takes Investing $1,000 In These 3 Stocks For $200 In Passive Income Every Year
• Positive Sentiment: A comparison of two BDCs focuses on monthly payout growth and retirement-account suitability, keeping investor attention on ARCC’s distribution record and ability to provide compounding income. Only 1 of These 2 BDCs Keeps Raising Its Monthly Payout
• Neutral Sentiment: A brokerage-focused report says analysts’ average recommendation suggests adding Ares Capital to a portfolio, but it also cautions that sell-side recommendations can be overly optimistic and should not be used alone as a buy signal. Brokers Suggest Investing in Ares Capital
• Negative Sentiment: The high-yield articles note that unusually large payouts can carry risks, including pressure on the underlying business or dividend sustainability. ARCC’s latest quarter also showed EPS of $0.47, down from $0.50 a year earlier, while revenue came in slightly below estimates. Boomers Are Piling Into These 5 High-Yield Dividend Stocks

Wall Street Analysts Forecast Growth

A number of research firms have commented on ARCC. Wall Street Zen lowered Ares Capital from a "hold" rating to a "sell" rating in a research report on Sunday, August 2nd. JPMorgan Chase & Co. lowered their price objective on Ares Capital from $19.00 to $18.50 and set an "overweight" rating for the company in a research report on Thursday, July 2nd. Keefe, Bruyette & Woods cut their price objective on Ares Capital from $21.00 to $20.00 and set an "outperform" rating on the stock in a research note on Thursday, July 30th. Weiss Ratings reiterated a "hold (c)" rating on shares of Ares Capital in a report on Friday, September 4th. Finally, UBS Group increased their target price on shares of Ares Capital from $19.00 to $21.00 and gave the company a "neutral" rating in a research report on Tuesday, September 1st. Eight investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the company's stock. According to MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and an average target price of $20.60.

Ares Capital Company Profile

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.