Ares Capital Corporation (NASDAQ:ARCC) Receives Average Rating of “Moderate Buy” from Brokerages

Ares Capital Corporation (NASDAQ:ARCC) has earned a consensus recommendation of “Moderate Buy” from the nine ratings firms that are currently covering the stock, MarketBeat.com reports. Two equities research analysts have rated the stock with a hold recommendation and seven have issued a buy recommendation on the company. The average 1 year target price among brokerages that have issued ratings on the stock in the last year is $21.3750.

ARCC has been the subject of several research reports. Weiss Ratings reissued a “hold (c+)” rating on shares of Ares Capital in a research report on Monday, December 29th. B. Riley Financial restated a “buy” rating on shares of Ares Capital in a report on Monday, February 9th. Wells Fargo & Company reduced their price objective on shares of Ares Capital from $21.00 to $20.00 and set an “overweight” rating for the company in a report on Thursday, February 5th. UBS Group decreased their target price on shares of Ares Capital from $21.00 to $19.00 and set a “neutral” rating for the company in a research report on Friday, March 13th. Finally, Royal Bank Of Canada lowered their target price on shares of Ares Capital from $23.00 to $22.00 and set an “outperform” rating on the stock in a report on Monday, February 9th.

Insider Activity at Ares Capital

In related news, CEO Michael Kort Schnabel purchased 12,500 shares of the firm’s stock in a transaction that occurred on Thursday, February 5th. The stock was acquired at an average price of $19.13 per share, for a total transaction of $239,125.00. Following the completion of the acquisition, the chief executive officer owned 40,500 shares of the company’s stock, valued at $774,765. This represents a 44.64% increase in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CFO Scott C. Lem purchased 5,186 shares of the firm’s stock in a transaction that occurred on Friday, February 6th. The shares were bought at an average price of $19.29 per share, with a total value of $100,037.94. Following the acquisition, the chief financial officer directly owned 39,463 shares of the company’s stock, valued at $761,241.27. This represents a 15.13% increase in their position. The disclosure for this purchase is available in the SEC filing. Corporate insiders own 0.49% of the company’s stock.

Hedge Funds Weigh In On Ares Capital

A number of hedge funds have recently bought and sold shares of the company. City Holding Co. raised its holdings in shares of Ares Capital by 444.4% in the third quarter. City Holding Co. now owns 1,225 shares of the investment management company’s stock valued at $25,000 after purchasing an additional 1,000 shares during the last quarter. Palladiem LLC purchased a new position in Ares Capital during the fourth quarter worth about $26,000. SWAN Capital LLC bought a new stake in Ares Capital in the 3rd quarter worth about $27,000. Sankala Group LLC bought a new stake in Ares Capital in the 4th quarter worth about $28,000. Finally, NBT Bank N A NY purchased a new stake in Ares Capital in the 3rd quarter valued at about $31,000. 27.38% of the stock is owned by hedge funds and other institutional investors.

Ares Capital News Roundup

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

• Positive Sentiment: Analysts/income investors continue to highlight ARCC’s high dividend yield (cited ~10.5%) and resilient credit profile as a buy-on-dip opportunity, attracting yield-seeking capital that supports the share price. I’m Buying These 10-11% Yields For Recurring Income
• Positive Sentiment: Commentary calling ARCC and peers “proven outperformers” now yielding ~10% fuels dip-buying flows into BDCs, which can limit downside and lift near-term demand for ARCC shares. Dip Buying Alert: 2 Proven Outperformers Now Yielding 10%
• Positive Sentiment: Some investors see recent repricing of BDC credit risk as overdone and are “all in” on BDCs; this bullish sentiment can support ARCC’s valuation if flows continue. After Recognising This, I’ve Decided To Go All In On BDCs
• Positive Sentiment: Coverage comparing ARCC to other asset managers notes ARCC trades at a discount to NAV, presenting a potential value trade for long-term income investors. Ares Capital And Blue Owl Capital Trade At A Discount To NAV – Which Is The Better Buy?
• Neutral Sentiment: General note to “filter the noise”: some commentary urges caution and disciplined income planning—useful for risk management but not a direct catalyst. Filtering The Noise – Protect Your Income Stream
• Negative Sentiment: Sector liquidity stress: Ares Management capped redemptions in its Strategic Income Fund as withdrawal requests rise across private credit, signaling potential funding/market-pressure concerns that could weigh on investor sentiment for ARCC. Ares Caps Redemptions as Private Credit Pressures Build
• Negative Sentiment: Short interest has risen meaningfully in March (reported ~40.3M shares as of Mar 13, about 5.6% of shares), which can increase downward pressure and volatility if short sellers remain active. Note reporting on short interest includes some inconsistent/erroneous entries in public feeds—verify official exchange filings for trading decisions.

Ares Capital Stock Up 0.6%

Shares of NASDAQ:ARCC opened at $18.06 on Friday. The business’s 50 day simple moving average is $19.30 and its two-hundred day simple moving average is $20.03. The firm has a market cap of $12.97 billion, a P/E ratio of 9.71 and a beta of 0.59. The company has a debt-to-equity ratio of 1.12, a quick ratio of 1.70 and a current ratio of 1.70. Ares Capital has a 52-week low of $17.59 and a 52-week high of $23.42.

Ares Capital (NASDAQ:ARCC) last released its quarterly earnings data on Wednesday, February 4th. The investment management company reported $0.50 EPS for the quarter, meeting the consensus estimate of $0.50. Ares Capital had a return on equity of 9.89% and a net margin of 42.56%.The firm had revenue of $793.00 million during the quarter, compared to the consensus estimate of $795.20 million. During the same quarter in the previous year, the company posted $0.55 earnings per share. The company’s quarterly revenue was up 4.5% on a year-over-year basis. As a group, research analysts forecast that Ares Capital will post 2.19 EPS for the current fiscal year.

Ares Capital Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, March 31st. Shareholders of record on Friday, March 13th will be issued a dividend of $0.48 per share. This represents a $1.92 dividend on an annualized basis and a yield of 10.6%. The ex-dividend date of this dividend is Friday, March 13th. Ares Capital’s payout ratio is currently 103.23%.

About Ares Capital

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.