Ares Capital Sees Unusually High Options Volume (NASDAQ:ARCC)

Ares Capital Corporation (NASDAQ:ARCC) was the recipient of unusually large options trading activity on Monday. Investors bought 10,605 put options on the stock. This represents an increase of 43% compared to the average volume of 7,423 put options.

Ares Capital Trading Up 1.7%

Shares of Ares Capital stock opened at $17.74 on Tuesday. The firm has a market cap of $12.74 billion, a price-to-earnings ratio of 9.54 and a beta of 0.59. Ares Capital has a 52-week low of $17.40 and a 52-week high of $23.42. The company’s 50-day simple moving average is $19.10 and its 200-day simple moving average is $19.91. The company has a quick ratio of 1.70, a current ratio of 1.70 and a debt-to-equity ratio of 1.12.

Ares Capital (NASDAQ:ARCC) last announced its quarterly earnings data on Wednesday, February 4th. The investment management company reported $0.50 EPS for the quarter, meeting analysts’ consensus estimates of $0.50. Ares Capital had a net margin of 42.56% and a return on equity of 9.89%. The firm had revenue of $793.00 million during the quarter, compared to the consensus estimate of $795.20 million. During the same quarter last year, the firm earned $0.55 earnings per share. The firm’s revenue was up 4.5% compared to the same quarter last year. As a group, equities research analysts anticipate that Ares Capital will post 2.19 earnings per share for the current year.

Ares Capital Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, March 31st. Stockholders of record on Friday, March 13th will be issued a $0.48 dividend. This represents a $1.92 annualized dividend and a dividend yield of 10.8%. The ex-dividend date of this dividend is Friday, March 13th. Ares Capital’s dividend payout ratio (DPR) is currently 103.23%.

Insiders Place Their Bets

In related news, CFO Scott C. Lem acquired 5,186 shares of the firm’s stock in a transaction on Friday, February 6th. The stock was bought at an average price of $19.29 per share, for a total transaction of $100,037.94. Following the completion of the purchase, the chief financial officer directly owned 39,463 shares of the company’s stock, valued at approximately $761,241.27. The trade was a 15.13% increase in their position. The transaction was disclosed in a filing with the SEC, which is accessible through this hyperlink. Also, CEO Michael Kort Schnabel acquired 12,500 shares of the company’s stock in a transaction on Thursday, February 5th. The shares were purchased at an average cost of $19.13 per share, for a total transaction of $239,125.00. Following the acquisition, the chief executive officer owned 40,500 shares of the company’s stock, valued at approximately $774,765. The trade was a 44.64% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. 0.49% of the stock is owned by insiders.

Institutional Trading of Ares Capital

A number of institutional investors have recently modified their holdings of ARCC. Morgan Stanley raised its position in Ares Capital by 2.0% in the fourth quarter. Morgan Stanley now owns 17,558,581 shares of the investment management company’s stock worth $355,210,000 after acquiring an additional 341,578 shares in the last quarter. UBS Group AG boosted its position 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 purchasing an additional 3,301,890 shares in the last quarter. Bank of America Corp DE grew its stake in shares of Ares Capital by 8.9% during the 2nd quarter. Bank of America Corp DE now owns 8,678,129 shares of the investment management company’s stock worth $190,572,000 after purchasing an additional 705,882 shares during the period. Legal & General Group Plc grew its stake in shares of Ares Capital by 16.4% during the 4th quarter. Legal & General Group Plc now owns 5,408,067 shares of the investment management company’s stock worth $109,432,000 after purchasing an additional 761,838 shares during the period. Finally, Wells Fargo & Company MN increased its holdings in shares of Ares Capital by 1.5% in the 4th quarter. Wells Fargo & Company MN now owns 4,387,637 shares of the investment management company’s stock valued at $88,762,000 after purchasing an additional 63,796 shares in the last quarter. 27.38% of the stock is currently owned by hedge funds and other institutional investors.

Analyst Upgrades and Downgrades

A number of research analysts recently issued reports on the company. B. Riley Financial restated a “buy” rating on shares of Ares Capital in a research note on Monday, February 9th. Weiss Ratings reiterated a “hold (c+)” rating on shares of Ares Capital in a research note on Monday, December 29th. Wall Street Zen downgraded Ares Capital from a “hold” rating to a “sell” rating in a report on Saturday, February 7th. UBS Group lowered their target price on shares of Ares Capital from $21.00 to $19.00 and set a “neutral” rating on the stock in a research report on Friday, March 13th. Finally, Royal Bank Of Canada cut their target price on shares of Ares Capital from $23.00 to $22.00 and set an “outperform” rating on the stock in a report on Monday, February 9th. Seven investment analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company’s stock. According to MarketBeat, the stock currently has an average rating of “Moderate Buy” and an average target price of $21.38.

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.