trending Market Intelligence /marketintelligence/en/news-insights/trending/qYNat32bXUAUN7Pzx-LeFw2 content esgSubNav
In This List

Compass Point expects Ares Capital shares to pick up


Banking Essentials Newsletter: September Edition, Part - 2


S&P Capital IQ Pro | Unrivaled Sector Coverage


S&P Capital IQ Pro | Powering Your Edge


Street Talk Episode 81: Amid strong recovery, Banc of California hearing more M&A chatter

Compass Point expects Ares Capital shares to pick up

Compass Point analyst Casey Alexander initiated coverage on Ares Capital Corp. at "buy," saying the company is trading at a discount to historical average price to net asset value, which serves as a "worthwhile" entry point.

The analyst expects the shares to trade at historical average plus a reasonable premium once the "unwarranted" fears of a dividend cut subside. Alexander said the company has multiple levers, including yield enhancement, to achieve dividend coverage. He noted that the company has nearly $2.5 billion in lower-yielding assets which can be redeployed into loans that can earn 200 to 250 basis points higher than the current yield.

Alexander's price target for the company is $17.50. His EPS estimates are $1.37 for 2017 and $1.56 for 2018.