J.M. Arbour LLC Makes New Investment in Ares Capital Corporation $ARCC

Key Points

• J.M. Arbour LLC opened a new position in Ares Capital, buying 56,399 shares (~$1.14M) in Q4, while several other institutions also increased or initiated stakes (institutional ownership ~27.4%).
• Ares declared a quarterly dividend of $0.48 (annualized $1.92), translating to a 10.2% yield with a payout ratio of about 103%, a potentially unsustainably high payout for income investors to consider.
• Insiders (CEO and CFO) recently purchased shares, the company reported Q4 EPS of $0.50 in line with estimates, and analysts maintain a consensus rating of “Moderate Buy” (average price target ~$21.25).

J.M. Arbour LLC acquired a new position in shares of Ares Capital Corporation (NASDAQ:ARCC - Free Report) during the 4th quarter, according to its most recent Form 13F filing with the Securities & Exchange Commission. The fund acquired 56,399 shares of the investment management company's stock, valued at approximately $1,141,000.

Several other large investors have also modified their holdings of ARCC. Independent Wealth Network Inc. grew its stake in shares of Ares Capital by 5.3% during the fourth quarter. Independent Wealth Network Inc. now owns 53,241 shares of the investment management company's stock valued at $1,077,000 after buying an additional 2,673 shares during the last quarter. Private Trust Co. NA grew its stake in shares of Ares Capital by 16.4% during the fourth quarter. Private Trust Co. NA now owns 30,573 shares of the investment management company's stock valued at $618,000 after buying an additional 4,314 shares during the last quarter. Key Capital Management INC bought a new position in shares of Ares Capital during the fourth quarter valued at approximately $154,000. Mirae Asset Global Investments Co. Ltd. bought a new position in shares of Ares Capital during the fourth quarter valued at approximately $84,000. Finally, Xcel Wealth Management LLC grew its stake in shares of Ares Capital by 9.5% during the fourth quarter. Xcel Wealth Management LLC now owns 20,935 shares of the investment management company's stock valued at $424,000 after buying an additional 1,812 shares during the last quarter. Hedge funds and other institutional investors own 27.38% of the company's stock.

Ares Capital News Roundup

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

• Positive Sentiment: Private‑credit markets are described as calm, which is supporting Ares’s earnings outlook and helped push shares of Ares and peers higher as investors gain confidence in asset valuations and fee income stability. Private Credit Looks Calm. Why Blackstone and Ares Stocks Are Starting to Climb.
• Positive Sentiment: Aggregate analyst coverage remains constructive — brokerages give ARCC a consensus “Moderate Buy,” which supports demand for the dividend REIT/credit manager. Ares Capital Corporation NASDAQ: ARCC Given Consensus Rating of "Moderate Buy" by Brokerages
• Neutral Sentiment: Mainstream dividend and income roundups are highlighting high‑yield names (the type of coverage that draws yield‑seeking flows into funds and names like ARCC), which can support longer‑term interest but is not an immediate catalyst. This $250,000 Income Portfolio Pays a $20,000 Annual Dividend
• Neutral Sentiment: Broader commentary advocating dividend stocks as retirement income keeps ARCC in investor consideration sets, but such thematic pieces are incremental rather than near‑term movers. Preparing For Retirement: Stop Trading, Buy Big Dividend Stocks Instead
• Negative Sentiment: Keefe, Bruyette & Woods trimmed its price target on ARCC from $22 to $21 while keeping an Outperform rating — a modest downward revision that can sap near‑term upside and weigh on sentiment. Keefe Bruyette & Woods Lowers ARCC Price Target

Ares Capital Stock Down 1.0%

Shares of NASDAQ ARCC opened at $18.78 on Friday. The company has a debt-to-equity ratio of 1.12, a quick ratio of 1.70 and a current ratio of 1.70. The firm has a market capitalization of $13.48 billion, a price-to-earnings ratio of 10.10 and a beta of 0.58. The stock has a 50 day moving average price of $18.62 and a 200 day moving average price of $19.67. 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 announced its quarterly earnings results on Wednesday, February 4th. The investment management company reported $0.50 earnings per share (EPS) for the quarter, meeting analysts' consensus estimates of $0.50. The firm had revenue of $793.00 million during the quarter, compared to analyst estimates of $795.20 million. Ares Capital had a return on equity of 9.89% and a net margin of 42.56%.Ares Capital's quarterly revenue was up 4.5% on a year-over-year basis. During the same quarter in the previous year, the business earned $0.55 earnings per share. Sell-side analysts expect that Ares Capital Corporation will post 2.19 earnings per share for the current year.

Ares Capital Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Tuesday, March 31st. Investors of record on Friday, March 13th were issued a $0.48 dividend. The ex-dividend date was Friday, March 13th. This represents a $1.92 dividend on an annualized basis and a dividend yield of 10.2%. Ares Capital's payout ratio is presently 103.23%.

Analyst Ratings Changes

A number of research firms have recently commented on ARCC. Weiss Ratings reaffirmed a "hold (c+)" rating on shares of Ares Capital in a research note on Monday, December 29th. JPMorgan Chase & Co. cut their target price on Ares Capital from $22.00 to $19.00 and set an "overweight" rating on the stock in a research note on Friday, March 13th. Wall Street Zen cut Ares Capital from a "hold" rating to a "sell" rating in a research note on Saturday, February 7th. B. Riley Financial reaffirmed a "buy" rating on shares of Ares Capital in a research note on Monday, February 9th. Finally, Royal Bank Of Canada cut their target price on Ares Capital from $23.00 to $22.00 and set an "outperform" rating on the stock in a research note on Monday, February 9th. Seven analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company's stock. According to MarketBeat, the stock presently has an average rating of "Moderate Buy" and an average price target of $21.25.

Insider Buying and Selling

In other news, CFO Scott C. Lem purchased 5,186 shares of the stock in a transaction that occurred on Friday, February 6th. The stock was purchased at an average price of $19.29 per share, for a total transaction of $100,037.94. Following the completion of the acquisition, the chief financial officer owned 39,463 shares of the company's stock, valued at approximately $761,241.27. This trade represents a 15.13% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at the SEC website. Also, CEO Michael Kort Schnabel purchased 12,500 shares of the stock in a transaction that occurred on Thursday, February 5th. The stock was purchased at an average price of $19.13 per share, with a total value of $239,125.00. Following the acquisition, the chief executive officer directly owned 40,500 shares of the company's stock, valued at $774,765. This trade represents a 44.64% increase in their position. The SEC filing for this purchase provides additional information. 0.49% of the stock is currently owned by 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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