Smith Asset Management Co. LLC Takes Position in Ares Capital Corporation $ARCC

Key Points

• Smith Asset Management Co. LLC has acquired 275,616 shares of Ares Capital Corporation (NASDAQ:ARCC), valued at approximately $6,108,000, making it the firm's second-largest position.
• Ares Capital recently reported earnings of $0.50 per share for the quarter, falling short of expectations, with revenue of $614 million compared to the $748.76 million forecasted by analysts.
• The company declared a quarterly dividend of $0.48, representing an annualized yield of 8.5%, scheduled to be paid on September 30th to shareholders of record.

Smith Asset Management Co. LLC acquired a new position in Ares Capital Corporation (NASDAQ:ARCC - Free Report) in the 1st quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission. The firm acquired 275,616 shares of the investment management company's stock, valued at approximately $6,108,000. Ares Capital comprises about 5.7% of Smith Asset Management Co. LLC's portfolio, making the stock its 2nd biggest position.

Other large investors also recently added to or reduced their stakes in the company. Allspring Global Investments Holdings LLC increased its holdings in Ares Capital by 0.7% in the 1st quarter. Allspring Global Investments Holdings LLC now owns 241,119 shares of the investment management company's stock worth $5,343,000 after acquiring an additional 1,776 shares during the last quarter. Mirae Asset Global Investments Co. Ltd. increased its holdings in Ares Capital by 18.2% in the 1st quarter. Mirae Asset Global Investments Co. Ltd. now owns 47,840 shares of the investment management company's stock worth $1,058,000 after acquiring an additional 7,381 shares during the last quarter. Bessemer Group Inc. increased its holdings in Ares Capital by 23,571.4% in the 1st quarter. Bessemer Group Inc. now owns 3,314 shares of the investment management company's stock worth $73,000 after acquiring an additional 3,300 shares during the last quarter. GAMMA Investing LLC increased its holdings in Ares Capital by 2,116.0% in the 1st quarter. GAMMA Investing LLC now owns 13,274 shares of the investment management company's stock worth $2,940,000 after acquiring an additional 12,675 shares during the last quarter. Finally, SG Americas Securities LLC increased its holdings in Ares Capital by 2.8% in the 1st quarter. SG Americas Securities LLC now owns 24,361 shares of the investment management company's stock worth $540,000 after acquiring an additional 666 shares during the last quarter. Hedge funds and other institutional investors own 27.38% of the company's stock.

Ares Capital Price Performance

Shares of ARCC stock opened at $22.49 on Tuesday. The stock has a market cap of $15.86 billion, a price-to-earnings ratio of 10.97 and a beta of 0.70. The business's fifty day moving average is $22.54 and its 200 day moving average is $21.89. Ares Capital Corporation has a twelve month low of $18.26 and a twelve month high of $23.84. The company has a quick ratio of 1.14, 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 the consensus estimate of $0.51 by ($0.01). The firm had revenue of $614.00 million during the quarter, compared to analysts' expectations of $748.76 million. Ares Capital had a return on equity of 10.48% and a net margin of 44.94%.During the same period in the previous year, the company earned $0.61 earnings per share. Research analysts expect that Ares Capital Corporation will post 2.19 EPS for the current fiscal year.

Ares Capital Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Tuesday, September 30th. Investors of record on Monday, September 15th will be paid a $0.48 dividend. This represents a $1.92 annualized dividend and a yield of 8.5%. The ex-dividend date of this dividend is Monday, September 15th. Ares Capital's dividend payout ratio is presently 93.66%.

Wall Street Analyst Weigh In

Several brokerages have commented on ARCC. JMP Securities set a $23.00 target price on Ares Capital and gave the stock a "market outperform" rating in a research note on Thursday, July 31st. Wells Fargo & Company lifted their price target on Ares Capital from $22.00 to $23.00 and gave the company an "overweight" rating in a research report on Wednesday, July 30th. UBS Group lifted their price target on Ares Capital from $22.00 to $22.50 and gave the company a "neutral" rating in a research report on Wednesday, July 16th. B. Riley upgraded Ares Capital from a "neutral" rating to a "buy" rating and lifted their price target for the company from $22.50 to $23.50 in a research report on Wednesday, July 30th. Finally, Citigroup reiterated an "outperform" rating on shares of Ares Capital in a research report on Thursday, July 31st. Seven analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company's stock. According to data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and an average price target of $22.86.

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.

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