Ares Capital Expands Portfolio to $28.7 Billion, Maintains Stable Dividends
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Portfolio Growth: Ares Capital has invested $28.7 billion across 587 portfolio companies, a significant increase from $21.3 billion in late 2022, indicating strong expansion capabilities in the middle market that are expected to enhance company earnings further.
- Diversification Advantage: Ares invests across 35 industries, surpassing peers' average of 27, with its largest holding at only 1.5% of the portfolio, providing stronger risk mitigation during market fluctuations.
- Capital Commitments: In Q3, Ares made $3.9 billion in investment commitments across 35 new and 45 existing companies, funded by $2.6 billion from exited investments and $1 billion in new debt, showcasing its robust fundraising capabilities.
- Sustainable Dividends: Ares has delivered 16 years of stable or increasing quarterly dividends, with a current payout of $0.48 per share, below its GAAP net income of $0.57 per share, indicating the company's ability to maintain dividend levels in the future.
ARCC
$20.17+Infinity%1D
Analyst Views on ARCC
Wall Street analysts forecast ARCC stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ARCC is 22.44 USD with a low forecast of 21.00 USD and a high forecast of 24.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
10 Analyst Rating
8 Buy
2 Hold
0 Sell
Strong Buy
Current: 20.200
Low
21.00
Averages
22.44
High
24.00
Current: 20.200
Low
21.00
Averages
22.44
High
24.00
About ARCC
Ares Capital Corporation is a specialty finance company focused on providing direct loans and other investments in private middle market companies in the United States. The Company invests primarily in first lien senior secured loans (including unitranche loans, which are loans that combine both senior and subordinated debt, generally in a first lien position), and second lien senior secured loans. In addition to senior secured loans, it also invests in subordinated debt, which in some cases includes an equity component, and preferred equity. It also may invest up to 30% of its portfolio in non-qualifying assets. Its investment activities are focused on industries, such as software and services, health care services, commercial and professional services, financial services, commercial and professional services, insurance services, energy, food and beverage and others. The Company is externally managed by Ares Capital Management LLC (investment adviser).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
