Hsbc Holdings PLC Buys Shares of 64,500 Ares Capital Corporation $ARCC

Key Points

• HSBC Holdings PLC opened a new position in Ares Capital during the fourth quarter, buying 64,500 shares valued at about $1.3 million.
• Ares Capital continues to draw significant institutional interest, with large holders like Morgan Stanley and UBS increasing their stakes; overall, 27.38% of the stock is owned by institutions.
• The company most recently reported earnings of $0.47 per share, missing estimates by a penny, while paying a quarterly dividend of $0.48 that annualizes to a 10.2% yield.

Hsbc Holdings PLC bought a new position in Ares Capital Corporation (NASDAQ:ARCC - Free Report) during the 4th quarter, according to its most recent filing with the Securities & Exchange Commission. The firm bought 64,500 shares of the investment management company's stock, valued at approximately $1,305,000.

A number of other hedge funds and other institutional investors also recently made changes to their positions in ARCC. Morgan Stanley raised its stake in Ares Capital by 2.0% during the 4th quarter. Morgan Stanley now owns 17,558,581 shares of the investment management company's stock worth $355,210,000 after buying an additional 341,578 shares during the period. UBS Group AG increased its holdings in shares of Ares Capital by 41.8% in the fourth quarter. UBS Group AG now owns 11,201,905 shares of the investment management company's stock worth $226,615,000 after acquiring an additional 3,301,890 shares in the last quarter. Bank of America Corp DE raised its position in shares of Ares Capital by 8.9% during the second quarter. Bank of America Corp DE now owns 8,678,129 shares of the investment management company's stock worth $190,572,000 after purchasing an additional 705,882 shares during the period. Legal & General Group Plc raised its position in shares of Ares Capital by 16.4% during the fourth quarter. Legal & General Group Plc now owns 5,408,067 shares of the investment management company's stock worth $109,432,000 after purchasing an additional 761,838 shares during the period. Finally, Wells Fargo & Company MN lifted its holdings in shares of Ares Capital by 1.5% during the 4th quarter. Wells Fargo & Company MN now owns 4,387,637 shares of the investment management company's stock valued at $88,762,000 after purchasing an additional 63,796 shares in the last quarter. 27.38% of the stock is owned by institutional investors.

Ares Capital Stock Performance

NASDAQ ARCC opened at $18.78 on Monday. The stock has a market capitalization of $13.48 billion, a price-to-earnings ratio of 11.52 and a beta of 0.56. The stock's 50 day moving average price is $18.67 and its two-hundred day moving average price is $19.05. The company has a debt-to-equity ratio of 1.13, a quick ratio of 1.40 and a current ratio of 1.40. 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 quarterly earnings results on Tuesday, April 28th. The investment management company reported $0.47 earnings per share for the quarter, missing the consensus estimate of $0.48 by ($0.01). Ares Capital had a return on equity of 9.85% and a net margin of 37.30%.The business had revenue of $763.00 million for the quarter, compared to the consensus estimate of $778.00 million. During the same period in the prior year, the business earned $0.50 earnings per share. Ares Capital's revenue was up 4.2% compared to the same quarter last year. As a group, analysts anticipate that Ares Capital Corporation will post 1.9 earnings per share for the current fiscal year.

Ares Capital Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Tuesday, June 30th. Shareholders of record on Monday, June 15th were paid a $0.48 dividend. This represents a $1.92 annualized dividend and a yield of 10.2%. The ex-dividend date was Monday, June 15th. Ares Capital's payout ratio is presently 117.79%.

Wall Street Analyst Weigh In

A number of research firms recently issued reports on ARCC. JPMorgan Chase & Co. lowered their target price on Ares Capital from $19.00 to $18.50 and set an "overweight" rating for the company in a research note on Thursday, July 2nd. Wells Fargo & Company reaffirmed an "equal weight" rating and issued a $19.00 price target (down from $20.00) on shares of Ares Capital in a research note on Friday, June 12th. Keefe, Bruyette & Woods reduced their price target on shares of Ares Capital from $22.00 to $21.00 and set an "outperform" rating for the company in a report on Thursday, April 16th. B. Riley Financial lowered their price objective on shares of Ares Capital from $22.00 to $20.00 and set a "buy" rating for the company in a research report on Wednesday, April 29th. Finally, Citizens Jmp lowered their price objective on shares of Ares Capital from $23.00 to $22.00 and set a "market outperform" rating for the company in a research report on Wednesday, April 22nd. Eight research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the stock. According to MarketBeat, Ares Capital has an average rating of "Moderate Buy" and a consensus target price of $20.60.

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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