Ares Capital (NASDAQ:ARCC) Stock Crosses Below Fifty Day Moving Average – Should You Sell?

Ares Capital Corporation (NASDAQ:ARCC)’s share price crossed below its fifty day moving average during trading on Friday. The stock has a fifty day moving average of $19.16 and traded as low as $19.03. Ares Capital shares last traded at $19.13, with a volume of 4,134,933 shares traded.

Wall Street Analysts Forecast Growth

A number of equities analysts have issued reports on ARCC shares. Keefe, Bruyette & Woods cut their price target on Ares Capital from $21.00 to $20.00 and set an “outperform” rating for the company in a research note on Thursday, July 30th. Citigroup restated a “market outperform” rating on shares of Ares Capital in a report on Wednesday, October 28th. Weiss Ratings restated a “hold (c)” rating on shares of Ares Capital in a research report on Friday, September 4th. Truist Financial decreased their price target on Ares Capital from $22.00 to $21.00 and set a “buy” rating for the company in a research note on Thursday, July 30th. Finally, Wall Street Zen downgraded Ares Capital from a “hold” rating to a “sell” rating in a research report on Saturday, October 31st. Nine equities research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the stock. According to MarketBeat, the company has an average rating of “Moderate Buy” and an average target price of $20.39.

Ares Capital Trading Down 1.1%

The stock has a fifty day moving average price of $19.16 and a 200 day moving average price of $19.00. The stock has a market cap of $13.82 billion, a PE ratio of 15.68 and a beta of 0.60. The company has a debt-to-equity ratio of 1.08, a quick ratio of 1.00 and a current ratio of 1.00.

Ares Capital (NASDAQ:ARCC) last posted its earnings results on Tuesday, October 27th. The investment management company reported $0.46 earnings per share for the quarter, missing the consensus estimate of $0.48 by ($0.02). The firm had revenue of $763.00 million during the quarter, compared to analyst estimates of $776.34 million. Ares Capital had a net margin of 28.34% and a return on equity of 9.72%. The business’s revenue for the quarter was down 2.4% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $0.50 earnings per share. Equities analysts expect that Ares Capital Corporation will post 1.88 EPS for the current year.

Ares Capital Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Tuesday, December 29th. Stockholders of record on Tuesday, December 15th will be issued a dividend of $0.48 per share. The ex-dividend date is Tuesday, December 15th. This represents a $1.92 dividend on an annualized basis and a dividend yield of 10.0%. Ares Capital’s payout ratio is currently 157.38%.

Institutional Investors Weigh In On Ares Capital

A number of hedge funds and other institutional investors have recently bought and sold shares of ARCC. Van ECK Associates Corp raised its stake in shares of Ares Capital by 22.2% during the second quarter. Van ECK Associates Corp now owns 13,306,095 shares of the investment management company’s stock valued at $246,562,000 after acquiring an additional 2,418,984 shares during the last quarter. Bank of America Corp DE raised its stake in Ares Capital by 16.0% during the 1st quarter. Bank of America Corp DE now owns 9,135,454 shares of the investment management company’s stock valued at $164,621,000 after buying an additional 1,259,230 shares during the last quarter. Generali Asset Management SPA SGR boosted its position in shares of Ares Capital by 5.3% during the 3rd quarter. Generali Asset Management SPA SGR now owns 7,950,908 shares of the investment management company’s stock valued at $151,862,000 after acquiring an additional 402,913 shares during the last quarter. Legal & General Group Plc bought a new position in Ares Capital during the 2nd quarter worth about $120,538,000. Finally, HighTower Advisors LLC boosted its holdings in Ares Capital by 9.5% in the second quarter. HighTower Advisors LLC now owns 3,870,130 shares of the investment management company’s stock valued at $71,714,000 after purchasing an additional 335,197 shares during the last quarter. Institutional investors and hedge funds own 27.38% of the company’s stock.

About Ares Capital

Ares Capital Corporation (NASDAQ: ARCC) is a business development company that provides financing to middle-market companies. The company primarily invests in first-lien senior secured loans, second-lien loans, subordinated debt, and, to a lesser extent, equity securities. Its investments are generally designed to support acquisitions, recapitalizations, refinancings, growth initiatives, and other corporate activities.

Founded in 2004, Ares Capital is externally managed by Ares Capital Management LLC, an affiliate of Ares Management Corporation.