According to Zacks, “Shares of Ares Capital have outperformed the industry over the past six months. Further, the company has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Estimates have been stable lately ahead of the company's first-quarter 2019 earnings release. Its investment income growth is expected to continue, driven by the acquisition of American Capital, rise in demand for customized financing and improving economy. Further, the company is likely to record rise in investment commitments. However, mounting expenses are likely to hurt bottom-line growth to some extent. Moreover, the presence of high debt levels remain a major near term concern for the company.”
A number of other equities research analysts have also weighed in on ARCC. BidaskClub upgraded shares of Ares Capital from a hold rating to a buy rating in a report on Thursday, December 27th. National Securities boosted their target price on shares of Ares Capital from $19.00 to $20.00 and gave the stock a buy rating in a research report on Wednesday, February 13th. Finally, JMP Securities lifted their price objective on shares of Ares Capital from $19.00 to $19.50 and gave the company a market outperform rating in a research note on Wednesday, February 13th. Three equities research analysts have rated the stock with a hold rating and four have issued a buy rating to the company. Ares Capital has an average rating of Buy and a consensus price target of $19.10.
Ares Capital (NASDAQ:ARCC) last released its quarterly earnings data on Tuesday, February 12th. The investment management company reported $0.45 EPS for the quarter, beating the Thomson Reuters’ consensus estimate of $0.41 by $0.04. Ares Capital had a net margin of 64.17% and a return on equity of 9.69%. The business had revenue of $345.00 million during the quarter, compared to analyst estimates of $327.24 million. During the same quarter last year, the business earned $0.38 earnings per share. Research analysts anticipate that Ares Capital will post 1.71 EPS for the current fiscal year.
The firm also recently disclosed a quarterly dividend, which was paid on Friday, March 29th. Shareholders of record on Friday, March 15th were paid a dividend of $0.40 per share. This represents a $1.60 annualized dividend and a yield of 9.20%. This is a boost from Ares Capital’s previous quarterly dividend of $0.39. The ex-dividend date was Thursday, March 14th. Ares Capital’s payout ratio is presently 95.24%.
A number of hedge funds and other institutional investors have recently made changes to their positions in the business. Nwam LLC grew its holdings in shares of Ares Capital by 4.2% in the first quarter. Nwam LLC now owns 19,461 shares of the investment management company’s stock valued at $334,000 after purchasing an additional 780 shares during the period. Pennsylvania Trust Co purchased a new position in Ares Capital in the first quarter valued at approximately $12,769,000. American Asset Management Inc. grew its position in shares of Ares Capital by 23.2% during the first quarter. American Asset Management Inc. now owns 43,075 shares of the investment management company’s stock worth $738,000 after acquiring an additional 8,124 shares during the last quarter. Ipswich Investment Management Co. Inc. grew its position in shares of Ares Capital by 256.9% during the first quarter. Ipswich Investment Management Co. Inc. now owns 73,199 shares of the investment management company’s stock worth $1,255,000 after acquiring an additional 52,689 shares during the last quarter. Finally, Truvestments Capital LLC purchased a new position in shares of Ares Capital during the first quarter worth approximately $47,000. Institutional investors and hedge funds own 39.30% of the company’s stock.
About Ares Capital
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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