Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Ares Capital (ARCC) , which belongs to the Zacks Financial - SBIC & Commercial Industry industry.This private equity firm has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 4.25%.For the last reported quarter, Ares Capital came out with earnings of $0.63 ...

GMVozd/E+ via Getty Images Welcome to another installment of our BDC Market Weekly Review, where we discuss market activity in the Business Development Company ("BDC") sector from both the bottom-up - highlighting individual news and events - as well as the top-down - providing an overview of the broader market. We also try to add some historical context as well as relevant themes that look to be driving the market or that investors ought to be mindful of. This update covers the period through the fourt ...

Galeanu Mihai/iStock via Getty Images The broader income market has been in melt-up mode over the past year, and most recently, after the Fed refused to tighten the screws in light of stubbornly high inflation readings. Although this development has boosted returns, it has resulted in a less favorable investment environment as the compensation for bearing risk has been reduced to historically unattractive levels. In this article we take a look at the key features of the current credit market and highlight h ...

PM Images One of the big questions is what will happen to business development corporations (BDC) when the Fed starts its rate-cutting cycle. BDCs have become increasingly popular during the rate-hiking cycle as they generate larger returns for their shareholders and higher yields from their distributed income compared to risk-free assets. I think many of the popular BDCs will do well in a lower-rate environment, especially Ares Capital (NASDAQ:ARCC), often called the gold standard in the BDC realm. Rat ...

The most recent trading session ended with Ares Capital (ARCC) standing at $19.95, reflecting a -0.5% shift from the previouse trading day's closing. The stock trailed the S&P 500, which registered a daily gain of 0.57%. Meanwhile, the Dow experienced a rise of 0.83%, and the technology-dominated Nasdaq saw an increase of 0.39%.The the stock of private equity firm has fallen by 0.5% in the past month, lagging the Finance sector's gain of 2.81% and the S&P 500's gain of 2.97%.The upcoming earnings release of ...

Ares Capital Corporation (ARCC) is poised for top-line growth, driven by the rise in the demand for customized financing. An increase in investment commitments will likely keep supporting financials.However, while the company’s expansion plans are expected to enhance growth prospects, they might lead to increased expenses. Elevated expenses will, in turn, hurt the bottom line to an extent.The Zacks Consensus Estimate for the company’s current-year earnings has been unchanged over the past 30 days. This refl ...

Richard Drury Focus of Article: The focus of PART 1 of this article is to analyze Ares Capital Corp.’s (NASDAQ:ARCC) recent results and compare a handful of the company’s metrics to 14 business development company (“BDC”) peers. This analysis will show past and current data with supporting documentation within two detailed tables. Table 1 will compare ARCC’s recent net asset value (“NAV”) economic return (loss), net investment income (“NII”), stock price to annualized NII ratio, and percentage of total ...

5 High Yield Dividend Stocks To Buy and Hold Forever jittawit21 / Shutterstock.com Investors love dividend stocks because they provide dependable income and give investors a great opportunity for solid total return. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. At 247 Wall St., we always remind our readers about the impact total return has on portfol ...

In the latest market close, Ares Capital (ARCC) reached $20.39, with a +0.79% movement compared to the previous day. The stock outperformed the S&P 500, which registered a daily gain of 0.51%. Elsewhere, the Dow gained 0.2%, while the tech-heavy Nasdaq added 0.58%.The private equity firm's stock has climbed by 1.45% in the past month, falling short of the Finance sector's gain of 4.57% and the S&P 500's gain of 2.94%.The investment community will be closely monitoring the performance of Ares Capital in its ...

Key Points Industry Overview - **Evolution of BDCs**: The BDC sector has evolved significantly over the past two decades, moving from smaller transactions and asset liability mismatches to larger, more transparent deals with institutional managers. [8-10] - **Private Credit Growth**: The rise of private credit has been driven by the need for alternative credit solutions, particularly post the global financial crisis. [11-12] - **Competitive Landscape**: The industry has seen an increase in new entrants, particularly in smaller deals. However, larger players with significant capital and experience maintain a competitive advantage. [32-33, 38-39, 41-42] Origination and Return Profiles - **Normalization of Syndicated Loan Markets**: The normalization of syndicated loan markets has led to increased competition for deals, but direct lending remains a preferred option due to its certainty, privacy, and customization. [15-18, 20] - **Impact on Return Profiles**: The normalization of markets has led to slightly tighter spreads and underwriting standards, but overall risk-adjusted returns remain attractive. [29-30] M&A Activity - **Pickup in M&A Activity**: There is a strong expectation for a pickup in M&A activity in 2024, driven by increased pressure on sellers to return capital and the availability of dry powder among buyers. [23-25, 27] - **Dependence on M&A**: While M&A activity is a significant driver of origination, larger BDCs like Ares Capital Corporation also benefit from a diverse portfolio of existing companies that require additional capital. [26] Credit Performance - **Low Non-Accrual Rates**: Despite elevated rates and economic concerns, non-accrual rates have remained low, reflecting the strong credit quality of portfolio companies. [46-47, 50] - **Downside Protections**: BDCs offer strong downside protections through low leverage, match-funded structures, and close relationships with private equity firms. [56-58, 60] Alternative Credit Outlook - **Shift to Direct Lending**: There is a structural shift away from syndicated lending towards direct lending, driven by the need for certainty, privacy, and customization. [65-67, 74-77] - **Banks' Role**: Banks are likely to remain in the business of distributing risk, but they are losing market share to direct lenders. [75-77] Macro and Rates - **Impact of Rate Changes**: A decline in base rates would likely reduce net investment income and dividends, but could be offset by increased transaction volume and upfront fees. [82-86] - **Funding Mix**: BDCs prefer diversified, durable sources of funding with laddered maturities to avoid forced debt issuance in unfavorable market conditions. [89-90]