Ares Capital (NASDAQ:ARCC) Issues Quarterly Earnings Results

Ares Capital (NASDAQ:ARCC) issued its earnings results on Wednesday. The investment management company reported $0.50 earnings per share for the quarter, meeting analysts’ consensus estimates of $0.50, FiscalAI reports. Ares Capital had a return on equity of 9.94% and a net margin of 42.56%.The firm had revenue of $793.00 million for the quarter, compared to the consensus estimate of $795.20 million. During the same quarter last year, the business posted $0.55 EPS. The company’s revenue was up 4.5% compared to the same quarter last year.

Here are the key takeaways from Ares Capital’s conference call:

• Ares reported solid 2025 results with core EPS of $2.01 for the year, ROE north of 10%, a modestly higher NAV, and declared a $0.48 quarterly dividend (Q1 2026), supported by an estimated $1.03 per-share taxable spillover.
• Originations hit a record $15.8 billion in 2025, the portfolio grew to $29.5 billion with 603 borrowers, over 100 new additions, and non-sponsored originations up >50%, providing expanded deal flow and diversification.
• Credit metrics remained stable—non-accruals at cost ~1.8%, weighted average portfolio grade ~3.1, average interest coverage improved to 2.2x, and average portfolio leverage declined ~0.25x EBITDA year-over-year.
• Balance sheet and funding strengthened with a record $4.5 billion of new gross debt commitments, $750 million five‑year issuance at SOFR+172bps, ~70% floating-rate borrowings, and pro forma liquidity above $6 billion, leaving leverage headroom (net debt-to-equity ~1.08x vs 1.25x target).
• Core EPS declined year-over-year (2025 core EPS $2.01 vs $2.33 in 2024) largely due to lower base rates, and management flagged an expected roughly $0.01 per-share headwind to Q1 2026 earnings from recent rate declines.

Ares Capital Price Performance

Shares of NASDAQ:ARCC opened at $18.79 on Friday. The company has a debt-to-equity ratio of 1.09, a quick ratio of 2.20 and a current ratio of 2.20. Ares Capital has a 52 week low of $18.26 and a 52 week high of $23.63. The firm has a market cap of $13.45 billion, a PE ratio of 10.10 and a beta of 0.59. The firm’s fifty day moving average is $20.41 and its 200-day moving average is $20.91.

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 dividend of $0.48 per share. This represents a $1.92 dividend on an annualized basis and a dividend yield of 10.2%. The ex-dividend date is Friday, March 13th. Ares Capital’s payout ratio is 103.23%.

Analysts Set New Price Targets

ARCC has been the topic of a number of recent analyst reports. Weiss Ratings reiterated a “hold (c+)” rating on shares of Ares Capital in a research report on Monday, December 29th. Wall Street Zen upgraded shares of Ares Capital from a “sell” rating to a “hold” rating in a research note on Sunday, October 19th. Wells Fargo & Company decreased their price target on shares of Ares Capital from $21.00 to $20.00 and set an “overweight” rating on the stock in a report on Thursday. UBS Group dropped their price objective on shares of Ares Capital from $22.50 to $21.00 and set a “neutral” rating for the company in a research note on Tuesday, October 14th. Finally, Royal Bank Of Canada cut their target price on shares of Ares Capital from $24.00 to $23.00 and set an “outperform” rating on the stock in a research report on Wednesday, October 29th. Seven research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the stock. According to data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and a consensus target price of $22.13.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently bought and sold shares of ARCC. Centaurus Financial Inc. grew its position in shares of Ares Capital by 39.6% in the 3rd quarter. Centaurus Financial Inc. now owns 19,858 shares of the investment management company’s stock valued at $405,000 after buying an additional 5,638 shares during the last quarter. Icon Advisers Inc. Co. acquired a new position in shares of Ares Capital in the third quarter worth approximately $3,467,000. Kestra Private Wealth Services LLC boosted its holdings in Ares Capital by 4.5% in the third quarter. Kestra Private Wealth Services LLC now owns 99,542 shares of the investment management company’s stock valued at $2,032,000 after acquiring an additional 4,282 shares during the last quarter. NewEdge Advisors LLC boosted its holdings in Ares Capital by 3.0% in the third quarter. NewEdge Advisors LLC now owns 134,175 shares of the investment management company’s stock valued at $2,739,000 after acquiring an additional 3,849 shares during the last quarter. Finally, CANADA LIFE ASSURANCE Co increased its position in Ares Capital by 91.8% during the 3rd quarter. CANADA LIFE ASSURANCE Co now owns 878,802 shares of the investment management company’s stock valued at $19,097,000 after purchasing an additional 420,728 shares during the period. 27.38% of the stock is owned by institutional investors and hedge funds.

Key Headlines Impacting Ares Capital

Here are the key news stories impacting Ares Capital this week:

• Positive Sentiment: Ares declared a quarterly dividend of $0.48 (annualized yield ~9.8%), reinforcing its high-income profile that attracts yield-focused investors. Dividend Announcement
• Positive Sentiment: Management signaled record originations of $15.8B for 2025 and said dividend stability is being maintained — a supportive operational update for future income generation. Originations Article
• Positive Sentiment: Core metrics: Q4 total investment income rose and core earnings roughly matched/edged past consensus (reported EPS ~$0.50–$0.517 depending on source), which lifted the stock on the report. Earnings Reaction
• Neutral Sentiment: Coverage and transcripts (earnings call, slide deck) provide transparency on portfolio performance and exit activity; useful for modeling but not an immediate catalyst. Earnings Call Transcript
• Neutral Sentiment: Sector note: Ares BDC says its software loan book remains healthy despite AI-related concerns — alleviates a potential sector-specific credit worry. Loan Book Article
• Negative Sentiment: Wells Fargo reduced its price target from $21 to $20 (keeps an overweight rating). The cut narrows analyst upside and may have contributed to selling pressure. Wells Fargo Note
• Negative Sentiment: Despite income strength, headline revenue narrowly missed consensus and headline EPS was roughly flat year-over-year, which can prompt profit-taking by traders after the initial post-earnings pop. Revenue Miss Article

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.