Ares Capital (NASDAQ:ARCC) Trading Down 3.1% on Disappointing Earnings

Ares Capital Co. (NASDAQ:ARCC) shares dropped 3.1% on Tuesday following a dissappointing earnings announcement. The company traded as low as $20.57 and last traded at $20.58. Approximately 2,192,321 shares changed hands during mid-day trading, a decline of 46% from the average daily volume of 4,086,413 shares. The stock had previously closed at $21.25.

The investment management company reported $0.50 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.54 by ($0.04). Ares Capital had a net margin of 50.90% and a return on equity of 11.54%. The firm had revenue of $599.00 million during the quarter, compared to analyst estimates of $769.32 million. During the same quarter in the previous year, the business posted $0.59 earnings per share. The business’s quarterly revenue was up 4.4% compared to the same quarter last year.

Ares Capital Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Monday, March 31st. Shareholders of record on Friday, March 14th were issued a $0.48 dividend. This represents a $1.92 dividend on an annualized basis and a yield of 9.29%. The ex-dividend date of this dividend was Friday, March 14th. Ares Capital’s dividend payout ratio (DPR) is presently 78.37%.

Wall Street Analyst Weigh In

Several research firms have recently issued reports on ARCC. Wells Fargo & Company dropped their price objective on shares of Ares Capital from $23.00 to $22.00 and set an “overweight” rating on the stock in a report on Monday. StockNews.com lowered Ares Capital from a “hold” rating to a “sell” rating in a research note on Friday, February 7th. JPMorgan Chase & Co. reduced their price objective on Ares Capital from $24.50 to $22.00 and set an “overweight” rating for the company in a research report on Thursday, April 24th. Keefe, Bruyette & Woods lowered their price objective on Ares Capital from $23.00 to $22.00 and set an “outperform” rating on the stock in a research report on Tuesday, April 8th. Finally, Raymond James cut Ares Capital from an “outperform” rating to a “market perform” rating in a research report on Thursday, February 6th. One equities research analyst has rated the stock with a sell rating, three have issued a hold rating, seven have assigned a buy rating and one has assigned a strong buy rating to the stock. According to data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and an average price target of $22.22.

Hedge Funds Weigh In On Ares Capital

Several institutional investors have recently added to or reduced their stakes in ARCC. Van ECK Associates Corp increased its holdings in shares of Ares Capital by 11.8% during the fourth quarter. Van ECK Associates Corp now owns 14,145,706 shares of the investment management company’s stock worth $309,649,000 after buying an additional 1,489,552 shares in the last quarter. Bank of America Corp DE grew its position in Ares Capital by 12.3% during the 4th quarter. Bank of America Corp DE now owns 7,951,926 shares of the investment management company’s stock worth $174,068,000 after acquiring an additional 871,370 shares during the last quarter. JPMorgan Chase & Co. increased its holdings in Ares Capital by 26.0% during the 4th quarter. JPMorgan Chase & Co. now owns 4,268,547 shares of the investment management company’s stock valued at $93,439,000 after purchasing an additional 881,450 shares in the last quarter. Generali Asset Management SPA SGR bought a new position in Ares Capital in the 4th quarter valued at $84,426,000. Finally, Advisors Capital Management LLC raised its position in Ares Capital by 3.1% in the 4th quarter. Advisors Capital Management LLC now owns 3,523,651 shares of the investment management company’s stock valued at $77,133,000 after purchasing an additional 105,526 shares during the last quarter. 27.38% of the stock is owned by institutional investors.

Ares Capital Trading Down 2.7 %

The company has a market cap of $14.15 billion, a price-to-earnings ratio of 8.44 and a beta of 0.77. The company has a debt-to-equity ratio of 1.03, a current ratio of 1.21 and a quick ratio of 1.21. The business has a 50 day simple moving average of $21.50 and a 200 day simple moving average of $21.94.

Ares Capital Company Profile

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.