(ARCC) - topped analysts' earnings expectations for five consecutive quarters by an average margin of 22.7%

Ares Capital Corporation (ARCC) topped the Street's earnings estimate for the past five quarters by an average margin of 22.7%. The Board of Directors declared a third-quarter dividend of 40 cents per share in early August. This Zacks #1 Rank stock has a price-to-book ratio of only 1.2, compared to 5.2 for the market. Full Analysis Ares Capital Corporation operates as a closed-end, nondiversified management investment company in the United States. The company's objective is to generate both current income and capital appreciation through debt and equity investments. ARCC primarily invests first and second lien senior loans, long-term mezzanine debt and equity investments. ARCC topped analysts' earnings expectations for five consecutive quarters by an average margin of 22.7%. In four of the five quarters, the company posted a double-digit earnings surprise. Looking ahead, earnings per share are projected to grow 11.3% over the next 3-5 years. On Aug 9, ARCC reported second-quarter profits of $16.7 million, or 44 cents per share. This marks a 33.3% improvement when compared to the 33 cents achieved in the second quarter of 2005. Net investment income grew 60.3% to $9.3 million from $5.8 million during the same period a year ago. The portfolio value of the company's investments as of Jun 30 was $878.2 million. The investments were comprised of approximately 67% in senior secured debt securities (35% in first lien and 32% in second lien assets), 25% in mezzanine debt securities, 6% in preferred/common equity securities and 2% in other securities (senior notes/CDO investments). The allocation does not account for ARCC's cash and cash equivalents. President Michael Arougheti stated, “We continued our track record of capital gains generation. We have posted capital gains in every quarter since inception, which provides continued dividend stability and visibility.” The Board of Directors declared a third-quarter cash dividend of 40 cents per share. The company's dividend in the second quarter was 38 cents. ARCC's current dividend yield is an astounding 8.9%. ARCC's return on equity, a common measure of management effectiveness, tops that of the industry average—10% compared to 9%. ARCC is currently trading at a valuation of 11.8x trailing 12-month earnings and at 12.2x current fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 17.1x trailing 12-month earnings and at 16.1x its current fiscal-year estimated earnings. The company has a price-to-book ratio of only 1.2, compared to 5.2 for the market. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. | Blog Home| VitalStocks Home Tags: ARCC, Ares Capital Corporation, Stock-market, Stocks, Investing, Stock Trading, Business, Finance, Trading, Investing Newsletter, Stock Picks, earnings, analysts, analysts estimates