ARCC Stock Recent News

Enbridge benefits from toll road-like cash flows, long-term contracts, steady distributable cash flow growth, and a reliable dividend, supported by a BBB+ credit rating. Ares Capital leverages its scale and industry expertise, generating strong returns through a well-diversified portfolio of senior loans and benefiting from rising M&A activity. Both companies maintain strong balance sheets with investment-grade credit ratings and conservative payout ratios, providing high-quality resilient cash flow in a volatile market.

In this article I have elaborated on my actual BDC portfolio. The objective of this portfolio is to beat the BDC-specific indices/ETFs and capture durable base dividends. The portfolio is optimized across leverage, dividend coverage, yield, and valuation levers.

Capital Southwest offers an 11% yield, strong balance sheet, and robust deal flow, making it a compelling investment in the underserved lower middle market. Omega Healthcare Investors provides a 7.4% yield, steady long-term leases, and improving operator fundamentals, offering growth in supply constrained markets. Both CSWC and OHI present attractive high-yielding opportunities, offering stability and potentially strong returns amidst market volatility and high-growth stock pressures.

TipRanks' analyst ranking service highlights three dividend-paying stocks, including McDonald's and Ares Capital.

Ares Capital delivered a solid 3.3% total NAV return, trades at an 8.25% dividend yield, and has a core earnings yield of 9.4%. The NAV rose to a record $19.89, marking the seventh consecutive quarterly rise, driven by retained income and unrealized appreciation. ARCC's portfolio is highly diversified with 535 companies, focusing on larger firms, and recently acquiring Riverside Credit Solutions to balance lending.

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Ares Capital achieved its highest portfolio value in Q4'24, driven by strong net investment income and robust demand for new net originations. Despite a slight increase in the non-accrual percentage, Ares Capital maintained excellent balance sheet quality and delivered a well-supported dividend with a 1.15X coverage ratio. The BDC trades at a price-to-NAV ratio of 1.18X, making shares slightly overvalued, in my opinion.

Recently, Zacks.com users have been paying close attention to Ares Capital (ARCC). This makes it worthwhile to examine what the stock has in store.

Dividends provide a reliable income stream, especially during tough economic times, alleviating financial pressure without the need to sell shares. Persistent inflation makes dividend income increasingly valuable, as it offers stability when market returns are volatile or negative. Investing in well-established, high-yield dividend companies with strong cash flows can ensure a steady income and reduce financial stress.

January saw solid investment activity with $1,500 in net capital added, primarily into Business Development Companies like Owl Rock Capital, Goldman Sachs BDC, and Blackstone Secured Lending Fund. Dividend income hit a record $814 in January, up 21% Y/Y, driven by ongoing investments in high-yield BDCs, aiming for $11,000 annual net dividends. Focus on maintaining steady BDC dividends and achieving a monthly increase of $100 in dividend income.