Richard Drury Ares Capital (NASDAQ:ARCC) is the largest business development company [BDC] by market capitalization. It currently offers a dividend yield of almost 9.7%, which is well-covered by its net investment income. ARCC has also shown signs of improvement in its portfolio with a decline in the percentage of its portfolio graded as the riskiest investments, i.e. those at higher risk of default. The portfolio In my previous coverage of ARCC, I looked at the portfolio and the risk of rising non-accr ...

TimAbramowitz Business development companies (BIZD) have been on a great run since early 2022 when the Federal Reserve began hiking interest rates. During that period, they have significantly outperformed other high-yield sectors, such as REITs (VNQ), by a wide margin. Data by YCharts This makes sense because the economy was on surprisingly strong footing and short-term interest rates were rising, both of which are strong tailwinds for BDCs. They tend to lend to riskier middle-market businesses with flo ...

Lux Blue Investment Thesis Have you ever invested in a high dividend yield company, attracted by its high yield, yet the result was a dividend reduction and poor stock performance? When selecting such high dividend yield companies, it is crucial to evaluate several factors to ensure the dividend is sustainable. A sustainable dividend is a key factor when gauging a company’s ability to constantly raise its dividend over time. To identify if a dividend is sustainable, factors such as the Payout Ratio, EPS ...

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Ares Capital (ARCC) .Ares Capital currently has an average broker ...

Dividend stocks can offer a good alternative to growth opportunities during periods of market volatility.After a spectacular performance in 2023 and a roaring start to 2024, the capital markets have started to cool down as of late.Naturally, the recent selling activity can be attributed to a variety of factors including mixed job data, the Federal Reserve's monetary policy outlook, and of course the upcoming presidential election. During times like these investors may opt to exit more growth-oriented opport ...

Richard Drury Ares Capital (ARCC) is a leading blue-chip business development company with a very impressive long-term track record. Data by YCharts On the other hand, while Oaktree Specialty Lending's (NASDAQ:OCSL) long-term track record is anything but impressive, since the company was taken over by Oaktree's management, it has managed to outperform the broader BDC space despite a recent sharp pullback in the stock price. Data by YCharts Additionally, it has delivered impressive dividend growth over t ...

YinYang In a turbulent landscape, where interest rates have risen sharply, and recession indicators have started to flash red, Ares Capital (NASDAQ:ARCC) has continued to weather the storm and slightly outperformed the S&P 500 (SPY) over the last 3 years. However, we do see a lot of headwinds toward Ares Capital as interest rate uncertainty kicks in with the Federal Reserve signaling to cut interest rates in the short term. This is happening against the backdrop of the end of the 40-year bull market in ...

LilliDay Introduction Although talks of a recession have picked up lately, I plan to continue to hold my Business Development Companies, so long as their fundamentals don't deteriorate. I'm a buy-and-hold investor who buys with the plan to hold for the long term. So, despite BDCs being considered riskier investments, I plan to hold if the economy does see a downturn in the coming months, same as I did when REITs were being slaughtered for the better part of two years. In this article, I discuss two BDCs ...

With an average yield above 8.9% at recent prices, investing in these stocks can do a lot to improve your passive income stream.Are you eager to improve your passive income stream with dividend-paying stocks? If so, finding high-yield options is easier now than it was just a few weeks ago.The S&P 500 reached a new peak on July 16, and it's been mostly downhill since. When the U.S. market closed on Aug. 7, the benchmark index was about 8.3% below its recent peak.A stock market sell-off isn't great for the pe ...

tadamichi In this article, we discuss the latest quarterly results from the Business Development Company Ares Capital (NASDAQ:ARCC). We have covered previous releases regularly, the last here. We maintain a Hold rating on the name as the fundamentals and valuation have remained stable. ARCC trades at a 9.2% dividend yield and has a core earnings yield of 11.73%. Its price trades at a 6% premium to book, in line with the average in our coverage, though above the median. The company delivered a solid 2.9% ...