Ares Capital (NASDAQ:ARCC) Shares Break Above 200 Day Moving Average – Should You Sell?

Ares Capital Corporation (NASDAQ:ARCC)’s stock price crossed above its two hundred day moving average during trading on Monday. The stock has a two hundred 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.

Analyst Upgrades and Downgrades

ARCC has been the subject of several recent analyst reports. Wall Street Zen raised Ares Capital from a “sell” rating to a “hold” rating in a report on Saturday, September 19th. JPMorgan Chase & Co. lowered their target price on shares of Ares Capital from $19.00 to $18.50 and set an “overweight” rating on the stock in a report on Thursday, July 2nd. Truist Financial dropped their price target on shares of Ares Capital from $22.00 to $21.00 and set a “buy” rating on the stock in a research report on Thursday, July 30th. Weiss Ratings reiterated a “hold (c)” rating on shares of Ares Capital in a research note on Friday, September 4th. Finally, Keefe, Bruyette & Woods decreased their price objective on shares of Ares Capital from $21.00 to $20.00 and set an “outperform” rating for the company in a research report on Thursday, July 30th. Eight research analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company’s stock. According to data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and a consensus target price of $20.60.

Ares Capital Stock Performance

The company has a debt-to-equity ratio of 1.14, a current ratio of 1.28 and a quick ratio of 1.28. The stock has a 50-day moving average price of $19.56 and a 200-day moving average price of $18.91. The company has a market capitalization of $13.80 billion, a price-to-earnings ratio of 14.24 and a beta of 0.57.

Ares Capital (NASDAQ:ARCC) last posted its earnings results on Wednesday, July 29th. The investment management company reported $0.47 earnings per share for the quarter, hitting analysts’ consensus estimates of $0.47. Ares Capital had a return on equity of 9.80% and a net margin of 30.91%.The business had revenue of $768.00 million for the quarter, compared to analyst estimates of $770.19 million. During the same period in the previous year, the firm earned $0.50 EPS. As a group, analysts forecast that Ares Capital Corporation will post 1.91 earnings per share for the current year.

Ares Capital Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, September 30th. Shareholders of record on Tuesday, September 15th will be issued a $0.48 dividend. This represents a $1.92 annualized dividend and a dividend yield of 10.0%. The ex-dividend date is Tuesday, September 15th. Ares Capital’s payout ratio is currently 142.22%.

Hedge Funds Weigh In On Ares Capital

Large investors have recently modified their holdings of the stock. Orion Capital Management LLC bought a new stake in shares of Ares Capital during the 2nd quarter worth about $25,000. Palladiem LLC bought a new position in Ares Capital in the 4th quarter valued at about $26,000. Sankala Group LLC acquired a new stake in Ares Capital during the fourth quarter worth approximately $28,000. Continuum Advisory LLC acquired a new stake in Ares Capital during the second quarter worth approximately $30,000. Finally, TOP Private Wealth LLC. bought a new stake in shares of Ares Capital during the second quarter worth approximately $31,000. 27.38% of the stock is owned by institutional investors.

About Ares Capital

Ares Capital Corporation (NASDAQ: ARCC) is a specialty finance company that operates as a business development company (BDC). It provides financing to middle-market companies, primarily through directly originated loans and other investments. Ares Capital seeks to support businesses that may require capital for acquisitions, growth initiatives, recapitalizations, refinancings and other corporate purposes.

The company invests across a range of industries and typically provides first-lien senior secured loans, second-lien loans, subordinated debt and, to a lesser extent, equity investments.