Ares Capital (NASDAQ:ARCC) Reaches New 12-Month Low – Here’s Why

Ares Capital Corporation (NASDAQ:ARCC)’s stock price reached a new 52-week low during mid-day trading on Monday . The company traded as low as $18.17 and last traded at $18.58, with a volume of 2885572 shares changing hands. The stock had previously closed at $18.62.

Analyst Ratings Changes

A number of research analysts have weighed in on the company. Weiss Ratings restated a “hold (c+)” rating on shares of Ares Capital in a research note on Monday, December 29th. Wells Fargo & Company cut their price target on shares of Ares Capital from $21.00 to $20.00 and set an “overweight” rating for the company in a research note on Thursday, February 5th. B. Riley Financial restated a “buy” rating on shares of Ares Capital in a research note on Monday, February 9th. Royal Bank Of Canada cut their target price on shares of Ares Capital from $23.00 to $22.00 and set an “outperform” rating for the company in a research note on Monday, February 9th. Finally, Wall Street Zen downgraded Ares Capital from a “hold” rating to a “sell” rating in a research report on Saturday, February 7th. Seven analysts have rated the stock with a Buy rating and two have issued a Hold rating to the stock. According to data from MarketBeat, the company has a consensus rating of “Moderate Buy” and a consensus price target of $22.00.

Ares Capital Stock Up 1.0%

The firm has a 50-day simple moving average of $19.99 and a two-hundred day simple moving average of $20.51. The stock has a market cap of $13.51 billion, a P/E ratio of 10.10 and a beta of 0.59. The company has a current ratio of 1.70, a quick ratio of 1.70 and a debt-to-equity ratio of 1.12.

Ares Capital (NASDAQ:ARCC) last released its quarterly earnings results on Wednesday, February 4th. The investment management company reported $0.50 EPS for the quarter, hitting analysts’ consensus estimates of $0.50. Ares Capital had a net margin of 42.56% and a return on equity of 9.89%. The business had revenue of $793.00 million for the quarter, compared to analyst estimates of $795.20 million. During the same period last year, the firm earned $0.55 earnings per share. Ares Capital’s revenue for the quarter was up 4.5% compared to the same quarter last year. Equities research analysts expect that Ares Capital Corporation will post 2.19 earnings per share for the current fiscal year.

Ares Capital Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Tuesday, March 31st. Stockholders of record on Friday, March 13th will be given a dividend of $0.48 per share. This represents a $1.92 dividend on an annualized basis and a dividend yield of 10.2%. The ex-dividend date is Friday, March 13th. Ares Capital’s dividend payout ratio is presently 103.23%.

Insiders Place Their Bets

In related news, CFO Scott C. Lem purchased 5,186 shares of the company’s stock in a transaction that occurred on Friday, February 6th. The stock was acquired at an average price of $19.29 per share, with a total value of $100,037.94. Following the completion of the purchase, the chief financial officer directly owned 39,463 shares in the company, valued at $761,241.27. This trade represents a 15.13% increase in their ownership of the stock. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, CEO Michael Kort Schnabel acquired 12,500 shares of Ares Capital stock in a transaction on Thursday, February 5th. The shares were purchased at an average price of $19.13 per share, for a total transaction of $239,125.00. Following the completion of the purchase, the chief executive officer directly owned 40,500 shares of the company’s stock, valued at approximately $774,765. This represents a 44.64% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. 0.48% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Ares Capital

Several institutional investors and hedge funds have recently added to or reduced their stakes in ARCC. UBS Group AG raised its holdings in shares of Ares Capital by 41.8% during the 4th quarter. UBS Group AG now owns 11,201,905 shares of the investment management company’s stock worth $226,615,000 after buying an additional 3,301,890 shares in the last quarter. Invesco Ltd. boosted its stake in shares of Ares Capital by 825.4% in the 2nd quarter. Invesco Ltd. now owns 3,551,711 shares of the investment management company’s stock valued at $77,996,000 after purchasing an additional 3,167,906 shares in the last quarter. Marshall Wace LLP bought a new stake in shares of Ares Capital during the 3rd quarter valued at approximately $36,943,000. Altshuler Shaham Ltd bought a new position in Ares Capital in the 4th quarter valued at approximately $33,380,000. Finally, Michael & Susan Dell Foundation bought a new position in shares of Ares Capital in the 4th quarter valued at $26,089,000. 27.38% of the stock is currently owned by institutional investors.

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.