Shares of Ares Capital Corporation ARCC gained 2.7%, following the release of its fourth-quarter and 2020 results. Core earnings of 54 cents per share for the reported quarter surpassed the Zacks Consensus Estimate of 40 cents. Moreover, the bottom line reflects a rise of 20% year over year.In the reported quarter, the company recorded a rise in total investment income along with higher expenses. Moreover, solid portfolio activity supported results to an extent. Further, the company’s liquidity position remained strong, which was a positive.GAAP net income was $378 million or 89 cents per share, up from $204 million or 48 cents per share recorded in the prior-year quarter.For 2020, core earnings per share of $1.74 beat the Zacks Consensus Estimate of $1.59. However, the bottom line declined 7.9% from the previous year. GAAP net income was $484 million or $1.14 per share, down from $793 million or $1.86 per share recorded in the prior year.Total Investment Income Improves, Expenses RiseQuarterly total investment income was $440 million, up 14% year over year. The rise was driven by an increase in capital structuring service fees and other income. Moreover, the reported figure surpassed the Zacks Consensus Estimate of $359.3 million.For the year, total investment income was $1.51 billion, down from $1.53 billion recorded in 2019. However, the top-line figure beat the Zacks Consensus Estimate of $1.43 billion.Total quarterly expenses were $204 million, up 5.7% from the prior-year level.Net investment income improved 20.5% year over year to $229 million.Balance Sheet StrongAs of Dec 31, 2020, the company’s cash and cash equivalents (including restricted cash) totaled $326 million, up from $176 million as of Dec 31, 2019.Moreover, Ares Capital had $3.3 billion available for additional borrowings under the existing credit facilities as of Dec 31, 2020. Total outstanding debt was $8.49 billion, up from $6.97 billion as of Dec 31, 2019.As of Dec 31, 2020, Ares Capital’s total assets amounted to $16.20 billion and stockholders’ equity was $7.18 billion.Further, net asset value was $16.97 per share, down from $17.32 as of Dec 31, 2019.Portfolio Activities StrongGross commitments worth $3.86 billion were made during the fourth quarter to new and existing portfolio companies. This compares with $1.61 billion worth of gross commitments in the prior-year quarter.Further, in the quarter, the company exited $3.03 billion of commitments compared with $1.22 billion a year ago.The fair value of Ares Capital’s portfolio investments was $15.52 billion as of Dec 31, 2020, which included $13.7 billion in accruing debt and other income-producing securities.Our TakeAn increase in demand for customized financing is expected to continue supporting Ares Capital. However, elevated expense levels (as witnessed in the fourth quarter as well) may hurt the bottom line.Ares Capital Corporation Price, Consensus and EPS Surprise Ares Capital Corporation price-consensus-eps-surprise-chart | Ares Capital Corporation QuoteCurrently, the company carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Earnings Release Dates of Other Finance StocksHercules Capital Inc. HTGC is scheduled to announce quarterly results on Feb 18. Main Street Capital Corporation MAIN and FS KKR Capital Corp. FSK are scheduled to announce results on Feb 25 and Mar 1, respectively.+1,500% Growth: One of 2021’s Most Exciting Investment OpportunitiesIn addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.Click here to download this report FREE >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ares Capital Corporation (ARCC): Free Stock Analysis Report Hercules Capital, Inc. (HTGC): Free Stock Analysis Report Main Street Capital Corporation (MAIN): Free Stock Analysis Report FS KKR Capital Corp. (FSK): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research