Morningstar Investment Management LLC Acquires New Holdings in Ares Capital Corporation (NASDAQ:ARCC)

Key Points

• Morningstar Investment Management LLC has invested approximately $414,000 in Ares Capital Corporation, acquiring 18,669 shares in the first quarter.
• Ares Capital's latest earnings report showed an EPS of $0.50, which missed analysts' estimates, while revenue was reported at $599 million, falling short of consensus expectations.
• Brokerages have adjusted their price targets for Ares Capital, with JPMorgan lowering its target from $24.50 to $22.00 and UBS raising it from $22.00 to $22.50, indicating varying perspectives on the stock's outlook.

Morningstar Investment Management LLC bought a new stake in Ares Capital Corporation (NASDAQ:ARCC - Free Report) in the first quarter, according to its most recent 13F filing with the Securities & Exchange Commission. The fund bought 18,669 shares of the investment management company's stock, valued at approximately $414,000.

A number of other hedge funds and other institutional investors also recently bought and sold shares of ARCC. Bank of America Corp DE boosted its position in shares of Ares Capital by 12.3% during the fourth quarter. Bank of America Corp DE now owns 7,951,926 shares of the investment management company's stock worth $174,068,000 after buying an additional 871,370 shares during the period. JPMorgan Chase & Co. raised its holdings in Ares Capital by 26.0% during the fourth quarter. JPMorgan Chase & Co. now owns 4,268,547 shares of the investment management company's stock worth $93,439,000 after purchasing an additional 881,450 shares in the last quarter. LPL Financial LLC raised its holdings in Ares Capital by 9.0% during the first quarter. LPL Financial LLC now owns 3,567,816 shares of the investment management company's stock worth $79,063,000 after purchasing an additional 293,442 shares in the last quarter. Advisors Capital Management LLC raised its holdings in Ares Capital by 3.1% during the fourth quarter. Advisors Capital Management LLC now owns 3,523,651 shares of the investment management company's stock worth $77,133,000 after purchasing an additional 105,526 shares in the last quarter. Finally, Allen Investment Management LLC raised its holdings in Ares Capital by 8.4% during the first quarter. Allen Investment Management LLC now owns 2,975,197 shares of the investment management company's stock worth $65,930,000 after purchasing an additional 230,924 shares in the last quarter. 27.38% of the stock is currently owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

Several research analysts have issued reports on ARCC shares. JPMorgan Chase & Co. dropped their price target on Ares Capital from $24.50 to $22.00 and set an "overweight" rating on the stock in a report on Thursday, April 24th. Citigroup reiterated an "outperform" rating on shares of Ares Capital in a research report on Thursday. Wells Fargo & Company lifted their price objective on shares of Ares Capital from $22.00 to $23.00 and gave the stock an "overweight" rating in a research report on Wednesday. B. Riley upgraded shares of Ares Capital from a "neutral" rating to a "buy" rating and lifted their price objective for the stock from $22.50 to $23.50 in a research report on Wednesday. Finally, Keefe, Bruyette & Woods lifted their price objective on shares of Ares Capital from $22.00 to $23.00 and gave the stock an "outperform" rating in a research report on Wednesday. One analyst has rated the stock with a sell rating, two have assigned a hold rating and seven have issued a buy rating to the company. Based on data from MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and a consensus price target of $22.86.

Ares Capital Price Performance

ARCC traded down $0.31 during midday trading on Friday, reaching $22.33. 2,267,131 shares of the company's stock were exchanged, compared to its average volume of 4,603,401. The firm has a market capitalization of $15.50 billion, a price-to-earnings ratio of 10.89 and a beta of 0.67. Ares Capital Corporation has a one year low of $18.26 and a one year high of $23.84. The business has a 50-day simple moving average of $22.24 and a two-hundred day simple moving average of $22.05. The company has a quick ratio of 1.40, a current ratio of 1.14 and a debt-to-equity ratio of 1.01.

Ares Capital (NASDAQ:ARCC - Get Free Report) last issued its quarterly earnings results on Tuesday, July 29th. The investment management company reported $0.50 earnings per share for the quarter, missing analysts' consensus estimates of $0.51 by ($0.01). The company had revenue of $614.00 million during the quarter, compared to analyst estimates of $748.76 million. Ares Capital had a net margin of 44.94% and a return on equity of 10.48%. During the same period in the prior year, the business earned $0.61 EPS. As a group, research analysts predict that Ares Capital Corporation will post 2.19 EPS for the current year.

Ares Capital Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, September 30th. Shareholders of record on Monday, September 15th will be paid a $0.48 dividend. This represents a $1.92 annualized dividend and a yield of 8.6%. The ex-dividend date is Monday, September 15th. Ares Capital's payout ratio is presently 93.66%.

Ares Capital Company Profile

Ares Capital Corporation is a business development company specializing in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle market companies. It also makes growth capital and general refinancing. It prefers to make investments in companies engaged in the basic and growth manufacturing, business services, consumer products, health care products and services, and information technology service sectors.