Ares Capital (NASDAQ:ARCC) Trading 2.5% Higher - Here's Why

Ares Capital Co. (NASDAQ:ARCC - Get Free Report)'s stock price shot up 2.5% during mid-day trading on Tuesday . The stock traded as high as $20.33 and last traded at $19.79. 2,430,444 shares traded hands during mid-day trading, a decline of 37% from the average session volume of 3,878,706 shares. The stock had previously closed at $19.31.

Wall Street Analyst Weigh In

ARCC has been the subject of a number of recent analyst reports. JPMorgan Chase & Co. upped their price objective on Ares Capital from $23.00 to $24.50 and gave the company an "overweight" rating in a report on Monday, February 3rd. Keefe, Bruyette & Woods cut their price target on shares of Ares Capital from $23.00 to $22.00 and set an "outperform" rating on the stock in a research report on Tuesday. Raymond James cut shares of Ares Capital from an "outperform" rating to a "market perform" rating in a report on Thursday, February 6th. Royal Bank of Canada increased their target price on shares of Ares Capital from $23.00 to $24.00 and gave the stock an "outperform" rating in a report on Friday, February 7th. Finally, Wells Fargo & Company decreased their price target on shares of Ares Capital from $24.00 to $23.00 and set an "overweight" rating for the company in a report on Thursday, February 6th. One equities research analyst has rated the stock with a sell rating, three have given a hold rating, seven have assigned a buy rating and one has assigned a strong buy rating to the company's stock. Based on data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus price target of $22.81.

Ares Capital Stock Up 0.4 %

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 company has a market capitalization of $13.63 billion, a price-to-earnings ratio of 8.13 and a beta of 0.77. The firm has a 50-day moving average price of $22.11 and a two-hundred day moving average price of $21.97.

Ares Capital (NASDAQ:ARCC - Get Free Report) last released its quarterly earnings results on Wednesday, February 5th. The investment management company reported $0.55 earnings per share for the quarter, missing analysts' consensus estimates of $0.58 by ($0.03). Ares Capital had a return on equity of 11.54% and a net margin of 50.90%. As a group, sell-side analysts anticipate that Ares Capital Co. will post 2.19 earnings per share for the current fiscal year.

Ares Capital Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Monday, March 31st. Shareholders of record on Friday, March 14th were paid a $0.48 dividend. The ex-dividend date of this dividend was Friday, March 14th. This represents a $1.92 annualized dividend and a yield of 9.64%. Ares Capital's payout ratio is currently 78.37%.

Hedge Funds Weigh In On Ares Capital

A number of large investors have recently modified their holdings of ARCC. Generali Asset Management SPA SGR acquired a new position in shares of Ares Capital during the 4th quarter worth approximately $84,426,000. Raymond James Financial Inc. bought a new position in shares of Ares Capital in the fourth quarter valued at $58,159,000. Van ECK Associates Corp increased its holdings in 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 during the last quarter. Two Sigma Investments LP raised its position in Ares Capital by 81.0% during the fourth quarter. Two Sigma Investments LP now owns 2,678,525 shares of the investment management company's stock worth $58,633,000 after acquiring an additional 1,198,580 shares in the last quarter. Finally, JPMorgan Chase & Co. lifted its stake in Ares Capital by 26.0% in the fourth quarter. JPMorgan Chase & Co. now owns 4,268,547 shares of the investment management company's stock valued at $93,439,000 after acquiring an additional 881,450 shares during the last quarter. 27.38% of the stock is currently owned by institutional investors and hedge funds.

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.