Should you short it before the Earnings result? : Ares Capital (NASDAQ:ARCC)

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Earnings results for Ares Capital (NASDAQ:ARCC)

Ares Capital Corporation is expected* to report earnings on 10/27/2020 before market open. The report will be for the fiscal Quarter ending Sep 2020. According to Zacks Investment Research, based on 8 analysts’ forecasts, the consensus EPS forecast for the quarter is $0.39. The reported EPS for the same quarter last year was $0.48.

Ares Capital last posted its quarterly earnings results on August 4th, 2020. The investment management company reported $0.39 EPS for the quarter, beating the consensus estimate of $0.38 by $0.01. The firm earned $350 million during the quarter, compared to analysts’ expectations of $353.26 million. Its revenue for the quarter was down 8.4% on a year-over-year basis. Ares Capital has generated $1.89 earnings per share over the last year and currently has a price-to-earnings ratio of 116.8. Ares Capital has confirmed that its next quarterly earnings report will be published on Tuesday, October 27th, 2020.

Analyst Opinion on Ares Capital (NASDAQ:ARCC)

9 Wall Street analysts have issued ratings and price targets for Ares Capital in the last 12 months. Their average twelve-month price target is $16.38, predicting that the stock has a possible upside of 16.88%. The high price target for ARCC is $20.00 and the low price target for ARCC is $15.00. There are currently 9 buy ratings for the stock, resulting in a consensus rating of “Buy.”

Ares Capital has received a consensus rating of Buy. The company’s average rating score is 3.00, and is based on 9 buy ratings, no hold ratings, and no sell ratings. According to analysts’ consensus price target of $16.38, Ares Capital has a forecasted upside of 16.9% from its current price of $14.01. Ares Capital has only been the subject of 3 research reports in the past 90 days.

Dividend Strength: Ares Capital (NASDAQ:ARCC)

Ares Capital is a leading dividend payer. It pays a dividend yield of 11.40%, putting its dividend yield in the top 25% of dividend-paying stocks. Ares Capital has only been increasing its dividend for 1 years. The dividend payout ratio of Ares Capital is 84.66%. Payout ratios above 75% are not desirable because they may not be sustainable. Based on EPS estimates, Ares Capital will have a dividend payout ratio of 97.56% in the coming year. This indicates that Ares Capital may not be able to sustain their current dividend.

Insiders buying/selling: Ares Capital (NASDAQ:ARCC)

In the past three months, Ares Capital insiders have bought more of their company’s stock than they have sold. Specifically, they have bought $719,480.00 in company stock and sold $0.00 in company stock. Only 0.60% of the stock of Ares Capital is held by insiders. Only 32.06% of the stock of Ares Capital is held by institutions.

Earnings and Valuation of Ares Capital (NASDAQ:ARCC

Earnings for Ares Capital are expected to grow by 4.46% in the coming year, from $1.57 to $1.64 per share. The P/E ratio of Ares Capital is 116.75, which means that it is trading at a more expensive P/E ratio than the market average P/E ratio of about 19.34. The P/E ratio of Ares Capital is 116.75, which means that it is trading at a more expensive P/E ratio than the Finance sector average P/E ratio of about 18.21. Ares Capital has a P/B Ratio of 0.80. P/B Ratios below 1 indicate that a company could be undervalued with respect to its assets and liabilities.

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