Group 1 - Avast has become a cultural reference point, particularly in contexts like speaking like a pirate or engaging with media related to high dividend opportunities [1] Group 2 - The company promotes a portfolio strategy that emphasizes generating income without the need for selling assets, aiming to alleviate the stress of retirement investing [4] - The Income Method offered by the company targets a yield of 9-10%, appealing to investors seeking strong returns [4] - A month-long paid trial is available for $49, with an additional 5% discount, encouraging potential investors to join [4]

Investment Strategy - The investment strategy focuses on constructing portfolios aimed at generating additional income through dividends, targeting a yield on cost of more than 12% over the next 10 years [1] - Emphasis is placed on identifying companies with significant competitive advantages and strong financials to provide attractive Dividend Yield and Dividend Growth [1] - The approach combines high Dividend Yield and Dividend Growth companies to reduce dependence on broader stock market fluctuations [1] Portfolio Diversification - A well-diversified portfolio across various sectors and industries is recommended to minimize portfolio volatility and mitigate risk [1] - Incorporating companies with a low Beta Factor is suggested to further reduce the overall risk level of the investment portfolio [1] - The suggested investment portfolios typically consist of a blend of ETFs and individual companies, emphasizing broad diversification and risk reduction [1] Total Return Focus - The selection process for high dividend yield and dividend growth companies is meticulously curated, prioritizing total return, which includes both capital gains and dividends [1] - This approach ensures that the portfolio is designed to maximize returns while considering the full spectrum of potential income sources [1] - Leveraging expertise in crafting investment portfolios aims to generate extra income through dividends while reducing risk through diversification [1]

Earlier in April, this year, I circulated a bullish piece on Ares Capital (NASDAQ: ARCC ), outlining the key reasons why it is worth buying ARCC before it jumps back in the premium territory. Roberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquidity of pan-Baltic capital markets. Other polic ...

Earnings season has reached the business development sector and one of the first BDCs that reported earnings for Q1 2025 was Ares Capital Corp. (NASDAQ: ARCC ) , the biggest BDC in the industry by market capitalization.A financial researcher and avid investor with a keen eye for innovation and disruption, as well as growth buy-outs and value stocks. Keeping an eye on the pace of high tech and early growth companies, I write about current events and the biggest news surrounding the industry, and strive to pr ...

Core Viewpoint - The article discusses three ultra-high-yield dividend stocks that investors should consider, highlighting their strong performance and growth potential in the current market environment. Group 1: Ares Capital - Ares Capital has a forward yield of 9.3% and has maintained stable or growing payouts for 15 consecutive years [3][5] - The company has the highest regular dividend growth over the last 10 years among externally managed business development companies with a market cap over $700 million [3] - Ares Capital primarily provides capital to middle-market businesses, representing a $3 trillion opportunity, with an additional $2.4 trillion from companies with revenues over $1 billion [4] - The company is well-positioned to capture market share, being the largest publicly traded business development company with a strong balance sheet and deep industry relationships [5] - Concerns regarding the CEO transition are mitigated by the new CEO's extensive experience within the company and industry [6] Group 2: Enterprise Products Partners - Enterprise Products Partners offers a forward yield of 6.9% and has increased its distribution for 26 consecutive years [7] - The company has demonstrated resilience in its cash flows during economic downturns, including the Great Recession and the COVID-19 pandemic [8] - Global demand for liquid hydrocarbons is expected to grow, with the U.S. maintaining a competitive advantage due to low production costs, positively impacting Enterprise's growth prospects [9] Group 3: Verizon Communications - Verizon Communications has a forward dividend yield of 6.3% and has increased its payouts for 18 straight years [10] - Despite a declining stock market, Verizon's share price has risen due to limited exposure to tariffs and strong business performance [11][12] - The company is expanding its offerings through the acquisition of Frontier Communications, expected to close in Q1 2026, which will enhance its products and services for consumers and small businesses [13]

Core Insights - Ares Capital Corporation (ARCC) reported lower-than-expected results for Q1 2025, with core earnings of 50 cents per share, missing the Zacks Consensus Estimate of 54 cents, and reflecting a 15.3% decline from the prior-year quarter [1] - The company's total investment income improved to $732 million, up 4.4% year over year, but still fell short of the Zacks Consensus Estimate of $770 million [3] - Ares Capital's gross commitments to portfolio companies were $3.45 billion, slightly down from $3.55 billion in the prior-year quarter, while portfolio exits decreased to $2.86 billion from $3.41 billion [4] Financial Performance - GAAP net income for Q1 2025 was $241 million or 36 cents per share, down from $449 million or 76 cents per share in the prior-year quarter [2] - Total quarterly expenses decreased to $360 million, down 2.4%, primarily due to negative capital gains incentive fees [3] - As of March 31, 2025, total assets were $28.3 billion, with stockholders' equity at $13.7 billion and a net asset value of $19.82 per share, down from $19.89 [5] Portfolio and Balance Sheet - The fair value of Ares Capital's portfolio investments was $27.1 billion, with accruing debt and other income-producing securities valued at $23.9 billion as of March 31, 2025 [4] - Cash and cash equivalents totaled $647 million, an increase from $635 million as of December 31, 2024, with $5.4 billion available for additional borrowings under existing credit facilities [5] Market Outlook - The demand for customized financing is expected to drive growth in total investment income, while increased investment commitments may support ARCC's financials [6] - However, potential cost increases from expansion strategies and regulatory constraints are identified as significant challenges [6]

Financial Data and Key Metrics Changes - The company reported GAAP net income per share of $0.56 for Q1 2025, down from $0.76 in Q1 2024 and $0.55 in the previous quarter [19] - Core earnings per share were $0.50, compared to $0.59 a year ago and $0.55 in the prior quarter, primarily due to a decline in portfolio yields [19][20] - The total portfolio at fair value increased to $27.1 billion from $26.7 billion in the previous quarter and $23.1 billion a year ago [21] Business Line Data and Key Metrics Changes - The company originated $3.5 billion in new investment commitments during Q1 2025, with approximately 60% coming from existing borrowers [26] - The weighted average yield on debt and other income-producing securities at amortized cost was 11.1% at the end of Q4 2024, down to 10.1% by the end of Q1 2025 [20] - The average debt to EBITDA ratio for portfolio companies was 5.7 times, the lowest since Q1 2020, indicating improved leverage [29] Market Data and Key Metrics Changes - New transaction activity in the liquid loan market dropped significantly as banks became more cautious, while the direct lending market remained stable [10][11] - The company noted increased volatility and widening spreads in secondary loan markets, with banks transitioning to a risk-off position [10][11] - The company has a significant amount of available capital totaling nearly $6.8 billion, positioning it well for new investments [14] Company Strategy and Development Direction - The company aims to capitalize on opportunities arising from market volatility, leveraging long-standing relationships to source deals [12][13] - The focus remains on service-oriented businesses that are more insulated from tariff impacts, with proactive engagement with portfolio companies to mitigate risks [15][17] - The company declared a quarterly dividend of $0.48 per share, marking the 63rd consecutive quarter of stable or increasing dividends [17][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating future market conditions, citing a strong investment team and a healthy portfolio [12][13] - The company anticipates a slower M&A environment but believes long-term drivers for M&A remain intact [11] - Management highlighted the importance of proactive communication with market participants to ensure readiness for new opportunities [12] Other Important Information - The company has a low non-accrual rate of 1.5% at cost, down from 1.7% in the previous quarter, indicating strong credit quality [29] - The company has a significant taxable income spillover estimated at $883 million or $1.29 per share available for distribution in 2025 [24] Q&A Session Summary Question: Impact of private BDCs on pricing and competitive position - Management noted that spreads have already begun to widen, indicating a shift in the market dynamics, and expressed confidence in outperforming competitors [35][36] Question: Analysis of tariff exposure - Management conducted a thorough analysis of portfolio companies' exposure to tariffs, finding a mid-single-digit percentage of companies potentially impacted [39][41] Question: Outlook on M&A deal volume - Management acknowledged the slowdown in M&A activity but emphasized their ability to capture market share in the current environment [45][47] Question: Strategies for managing rising costs of liabilities - Management highlighted their historical ability to maintain consistent ROE and mentioned potential strategies such as leveraging and utilizing spillover income [51][54] Question: Backlog and deal closure uncertainty - Management indicated that while there may be some uncertainty regarding the backlog due to market volatility, they remain optimistic about closing existing deals [75][77]

Financial Data and Key Metrics Changes - The company reported GAAP net income per share of $0.60 for Q1 2025, down from $0.76 in Q1 2024 and $0.55 in the previous quarter [19] - Core earnings per share were $0.50, compared to $0.59 a year ago and $0.55 in the prior quarter, primarily due to a decline in portfolio yields [19][20] - The total portfolio at fair value increased to $27.1 billion from $26.7 billion in the previous quarter and $23.1 billion a year ago [21] Business Line Data and Key Metrics Changes - The company committed $3.5 billion in gross commitments during the first quarter, a 54% increase compared to the same period last year [9][10] - The weighted average yield on debt and other income-producing securities at amortized cost was 11.1% at the end of Q4 2024, down to 10.1% by the end of Q1 2025 [20] - The portfolio companies reported a 12% weighted average LTM EBITDA growth, up from 11% in the prior quarter [28] Market Data and Key Metrics Changes - New transaction activity in the liquid loan market dropped significantly as banks became more cautious, leading to increased volatility and widening spreads in secondary loan markets [10][11] - The direct lending market remained stable, with certain transactions shifting from the syndicated loan market to private credit solutions [11] Company Strategy and Development Direction - The company aims to leverage its strong liquidity and conservative balance sheet leverage to capitalize on potential investment opportunities in a potentially improving spread environment [10][14] - The focus remains on domestic service-oriented businesses, which are believed to be more insulated from the impacts of higher tariffs [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate future market conditions, citing a seasoned investment team and strong relationships in the market [12][13] - The company declared a quarterly dividend of $0.48 per share, marking the 63rd consecutive quarter of stable or increasing dividends [17][24] Other Important Information - The company has nearly $6.8 billion in total available liquidity, positioning it well for future investments [22] - The non-accrual rate at cost ended the quarter at 1.5%, down from the previous quarter, indicating strong portfolio health [29] Q&A Session Summary Question: Will private credit provide similar or lower pricing than banks? - Management noted that spreads have already started to widen, indicating a shift in the market dynamics [35][36] Question: What is the exposure to tariffs for portfolio companies? - The company conducted a thorough analysis and found a mid-single-digit exposure to companies importing from high-tariff countries, emphasizing that this is an exposure analysis, not an impact analysis [39][41] Question: How does the company plan to manage earnings against rising costs of liabilities? - Management highlighted the ability to adjust leverage and utilize spillover income to manage costs effectively [50][54] Question: Is there a trend in portfolio stress or sectors experiencing issues? - Management indicated that there are no significant trends observed in portfolio stress at this time [102] Question: What is the outlook for new investment opportunities? - Management expressed optimism about the potential for larger deals in the private credit market, indicating a readiness to pivot as market conditions change [84][85]

Financial Performance - GAAP Net Income Per Share for Q1 2025 was $036, compared to $076 in Q1 2024[12] - Core EPS for Q1 2025 was $050, down from $059 in Q1 2024[12] - Net Investment Income Per Share for Q1 2025 was $054, slightly lower than $055 in Q1 2024[12] - Net Asset Value Per Share increased to $1982 in Q1 2025 from $1953 in Q1 2024[12] Portfolio Composition and Activity - Total Fair Value of Investments increased to $2713 billion in Q1 2025 from $23124 billion in Q1 2024[13] - Gross Commitments for Q1 2025 were $3453 billion, compared to $3554 billion in Q1 2024[13] - Exits of Commitments for Q1 2025 were $2857 billion, lower than $3414 billion in Q1 2024[13] - First Lien Senior Secured Loans accounted for 58% of the portfolio at fair value as of March 31, 2025[19] - Floating Rate investments represented 69% of the portfolio at fair value as of March 31, 2025[19] Debt and Dividends - The company estimates it will carry forward excess taxable income of approximately $883 million, or $129 per share, from 2024 for distribution to stockholders in 2025[77] - Unsecured Debt to Total Debt was 688% as of March 31, 2025[16]

Core Insights - Ares Capital reported $732 million in revenue for Q1 2025, a year-over-year increase of 4.4%, but fell short of the Zacks Consensus Estimate by 4.97% [1] - The earnings per share (EPS) for the quarter was $0.50, down from $0.59 a year ago, representing a surprise of -7.41% compared to the consensus estimate of $0.54 [1] Revenue and Earnings Performance - Dividend income was reported at $143 million, below the average estimate of $154.25 million from four analysts [4] - Other income reached $17 million, slightly above the average estimate of $16.73 million [4] - Capital structuring service fees totaled $46 million, close to the estimated $46.86 million [4] - Interest income from investments was $526 million, lower than the average estimate of $553.84 million [4] Stock Performance - Ares Capital's shares have returned -4.1% over the past month, compared to a -0.8% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]