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

Compass Point expects Ares Capital shares to pick up

Blog

Spotlight on sustainability: How banks can overcome the challenges of achieving net-zero emissions by 2050

Blog

Insight Weekly: US election scenarios; borrowing costs rise; commercial REIT fears

Podcast

Street Talk | Episode 100 - KBW CEO offers optimism for bears fearful of bank liquidity, credit

Blog

Insight Weekly: Stocks endure more pain; bank branch M&A slows; debt ratios fall


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.