Ares Capital (NASDAQ:ARCC) Announces Quarterly Earnings Results

Ares Capital (NASDAQ:ARCC) issued its earnings results on Wednesday. The investment management company reported $0.47 earnings per share for the quarter, meeting analysts’ consensus estimates of $0.47, FiscalAI reports. The company had revenue of $768.00 million for the quarter, compared to the consensus estimate of $770.19 million. Ares Capital had a return on equity of 9.74% and a net margin of 30.91%.During the same quarter in the prior year, the company earned $0.50 EPS.

Here are the key takeaways from Ares Capital’s conference call:

• Core earnings remained stable: Second-quarter Core EPS was $0.47, consistent with the prior quarter, while management maintained the $0.48 quarterly dividend. ARCC also reported approximately $988 million, or $1.38 per share, of taxable spillover income available for future distributions.
• Portfolio credit performance was generally healthy: Borrower EBITDA grew approximately 8% year over year, equity cushions remained above 50%, and non-accruals at cost were 2.4%, below ARCC’s historical average. Management said software investments were performing well and that higher AI-risk software exposure represented less than 50 basis points of the portfolio at fair value.
• Balance-sheet flexibility improved: ARCC ended the quarter with roughly $6 billion of available liquidity, modest net leverage of 1.12x debt-to-equity, and no additional unsecured note maturities in 2026. Its new $1 billion commercial paper program and other refinancing actions could lower funding costs and diversify capital sources.
• Deal activity was subdued but showed signs of recovery: ARCC originated $2.6 billion of commitments, with 75% involving existing borrowers, while June and July transaction pipelines improved. Management emphasized that it remained highly selective as deal quality weakened during parts of the quarter, but said larger upper-middle-market opportunities offered better terms and risk-adjusted returns.
• NAV declined modestly and industry credit normalization remains a risk: NAV fell $0.24 per share to $19.35, primarily due to market-driven valuation changes. Management expects non-accruals across the broader BDC industry to trend toward historical averages, although it said no specific sector was driving weakness in ARCC’s portfolio.

Ares Capital Trading Up 0.6%

NASDAQ:ARCC opened at $18.83 on Friday. The company has a market capitalization of $13.52 billion, a P/E ratio of 13.95 and a beta of 0.56. The stock’s 50 day moving average price is $18.67 and its 200 day moving average price is $18.91. The company has a debt-to-equity ratio of 1.13, a quick ratio of 1.40 and a current ratio of 1.40. Ares Capital has a 52 week low of $17.40 and a 52 week high of $22.85.

Ares Capital Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, September 30th. Investors of record on Tuesday, September 15th will be issued a $0.48 dividend. The ex-dividend date is Tuesday, September 15th. This represents a $1.92 dividend on an annualized basis and a yield of 10.2%. Ares Capital’s dividend payout ratio is currently 142.22%.

Analyst Ratings Changes

A number of brokerages recently commented on ARCC. Wells Fargo & Company reaffirmed 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. Weiss Ratings reiterated a “hold (c)” rating on shares of Ares Capital in a research report on Tuesday, June 9th. Truist Financial decreased their target price on shares of Ares Capital from $22.00 to $21.00 and set a “buy” rating for the company in a research note on Thursday. B. Riley Financial lowered their price target on shares of Ares Capital from $22.00 to $20.00 and set a “buy” rating on the stock in a report on Wednesday, April 29th. Finally, Keefe, Bruyette & Woods dropped their price target on shares of Ares Capital from $21.00 to $20.00 and set an “outperform” rating on the stock in a research note on Thursday. Eight investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the company. According to MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and an average price target of $20.40.

Ares Capital News Roundup

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

• Positive Sentiment: Ares Capital declared a third-quarter dividend of $0.48 per share, payable September 30 to shareholders of record September 15. The payment extends the company’s dividend streak to 17 years and represents an annualized yield of approximately 10.2%. Ares Capital Corporation Announces June 30, 2026 Financial Results and Declares Third Quarter 2026 Dividend
• Positive Sentiment: Management highlighted Ares Capital’s scale, strong liquidity and balance-sheet flexibility, along with improving lending terms. These factors may help the business navigate a slower transaction environment and support future investment income. Ares Capital’s Q2 Earnings Call Highlights Market Strength
• Positive Sentiment: Truist maintained a “buy” rating and Keefe, Bruyette & Woods kept an “outperform” rating, indicating analysts still see upside despite moderating their price targets to $21 and $20, respectively.
• Neutral Sentiment: Second-quarter earnings of $0.47 per share matched consensus, while revenue of $768 million was slightly below the $770.2 million estimate. Investment income improved, but the results offered limited upside surprise. ARCC Stock Dips as Q2 Earnings Meet Estimates and Expenses Rise Year Over Year
• Negative Sentiment: Higher operating expenses and realized and unrealized investment losses pressured quarterly results. EPS declined from $0.50 in the year-ago quarter, raising concerns about portfolio valuation and earnings momentum. Ares Capital Trades Lower as Realized and Unrealized Losses Hit Q2 Earnings
• Negative Sentiment: Analyst price-target reductions and warnings about the potential impact of a credit downturn temper the bullish dividend story, particularly because recessions could increase defaults and pressure distributable income. What a Credit Downturn Would Do to Ares Capital’s Big Dividend

Institutional Trading of Ares Capital

Several large investors have recently added to or reduced their stakes in ARCC. Marshall Wace LLP acquired a new position in shares of Ares Capital during the 3rd quarter worth $36,943,000. Michael & Susan Dell Foundation acquired a new stake in shares of Ares Capital in the 4th quarter valued at $26,089,000. Balyasny Asset Management L.P. acquired a new stake in shares of Ares Capital in the 4th quarter valued at $20,399,000. UBS Group AG boosted its holdings in Ares Capital by 11.8% in the third quarter. UBS Group AG now owns 7,900,015 shares of the investment management company’s stock worth $161,239,000 after purchasing an additional 836,826 shares in the last quarter. Finally, Bank of America Corp DE boosted its holdings in Ares Capital by 8.9% in the second quarter. Bank of America Corp DE now owns 8,678,129 shares of the investment management company’s stock worth $190,572,000 after purchasing an additional 705,882 shares in the last quarter. 27.38% of the stock is owned by institutional investors.

Ares Capital Company Profile

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.