Ares Capital (NASDAQ:ARCC) Stock Price Breaks Above Two Hundred Day Moving Average - Should You Sell?

Key Points

• Ares Capital shares rose above their 200-day moving average, reaching $19.23 and last trading at $19.13, compared with a 200-day average of $18.90.
• Analysts maintain a generally positive outlook, with eight Buy ratings and three Holds, an overall “Moderate Buy” consensus, and an average price target of $20.60.
• Ares Capital declared a quarterly dividend of $0.48, equivalent to $1.92 annually and a 10.0% yield; however, its 142.22% payout ratio exceeds reported earnings.

Ares Capital Corporation (NASDAQ:ARCC - Get Free Report) shares passed above its 200-day moving average during trading on Monday. The stock has a 200-day moving average of $18.90 and traded as high as $19.23. Ares Capital shares last traded at $19.13, with a volume of 3,985,519 shares traded.

Wall Street Analysts Forecast Growth

Several research analysts recently weighed in on ARCC shares. Truist Financial decreased their target price on Ares Capital from $22.00 to $21.00 and set a "buy" rating for the company in a research note on Thursday, July 30th. Wall Street Zen upgraded shares of Ares Capital from a "sell" rating to a "hold" rating in a research report on Saturday, September 19th. Keefe, Bruyette & Woods cut their price target on shares of Ares Capital from $21.00 to $20.00 and set an "outperform" rating for the company in a report on Thursday, July 30th. Weiss Ratings reissued a "hold (c)" rating on shares of Ares Capital in a report on Friday, September 4th. Finally, Wells Fargo & Company restated an "equal weight" rating and set a $19.00 price objective (down from $20.00) on shares of Ares Capital in a research report on Friday, June 12th. Eight equities research analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company. According to MarketBeat, Ares Capital currently has an average rating of "Moderate Buy" and a consensus price target of $20.60.

Ares Capital Price Performance

The business has a 50-day moving average price of $19.55 and a 200 day moving average price of $18.90. The company has a market cap of $13.74 billion, a price-to-earnings ratio of 14.17 and a beta of 0.57. The company has a current ratio of 1.28, a quick ratio of 1.28 and a debt-to-equity ratio of 1.14.

Ares Capital (NASDAQ:ARCC - Get Free Report) last released its quarterly earnings data on Wednesday, July 29th. The investment management company reported $0.47 earnings per share for the quarter, hitting the consensus estimate of $0.47. The business had revenue of $768.00 million during the quarter, compared to analyst estimates 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 last year, the company posted $0.50 EPS. As a group, research analysts expect that Ares Capital Corporation will post 1.91 earnings per share for the current fiscal year.

Ares Capital Dividend Announcement

The business 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 is Tuesday, September 15th. This represents a $1.92 dividend on an annualized basis and a dividend yield of 10.0%. Ares Capital's dividend payout ratio (DPR) is 142.22%.

Institutional Trading of Ares Capital

Several institutional investors and hedge funds have recently bought and sold shares of the stock. MCF Advisors LLC lifted its stake in Ares Capital by 12.4% during the second quarter. MCF Advisors LLC now owns 9,839 shares of the investment management company's stock valued at $182,000 after buying an additional 1,082 shares in the last quarter. Cidel Asset Management Inc. purchased a new position in shares of Ares Capital in the second quarter worth approximately $530,000. Integrated Wealth Concepts LLC increased its position in shares of Ares Capital by 5.1% in the second quarter. Integrated Wealth Concepts LLC now owns 61,533 shares of the investment management company's stock worth $1,140,000 after acquiring an additional 3,012 shares in the last quarter. NewEdge Advisors LLC increased its position in shares of Ares Capital by 33.5% in the second quarter. NewEdge Advisors LLC now owns 191,952 shares of the investment management company's stock worth $3,557,000 after acquiring an additional 48,134 shares in the last quarter. Finally, Baird Financial Group Inc. raised its holdings in shares of Ares Capital by 8.0% during the second quarter. Baird Financial Group Inc. now owns 1,177,508 shares of the investment management company's stock valued at $21,819,000 after acquiring an additional 87,353 shares during the period. Institutional investors and hedge funds own 27.38% of the company's stock.

About Ares Capital

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.

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