Group 1 - The article discusses the author's past experiences with investing, particularly the tendency to chase hype stocks that resulted in losses [1] - The author emphasizes a preference for dividend investing in quality blue-chip stocks, Business Development Companies (BDCs), and Real Estate Investment Trusts (REITs) [1] - The goal is to help lower and middle-class workers build investment portfolios focused on high-quality, dividend-paying companies to achieve financial independence [1] Group 2 - The author has a beneficial long position in the shares of PepsiCo (PEP) through stock ownership or derivatives [2] - The article expresses the author's personal opinions and is not influenced by compensation from any company mentioned [2] - There is a disclaimer regarding the past performance of investments and the lack of recommendations for specific investment suitability [3]

Company Performance - Ares Capital (ARCC) closed at $22.78, reflecting a +1.15% change from the previous day's closing price, outperforming the S&P 500's daily gain of 0.28% [1] - Over the past month, Ares Capital's shares gained 0.4%, underperforming the Finance sector's gain of 2.79% and the S&P 500's gain of 4.37% [1] Upcoming Financial Results - Ares Capital is set to announce its earnings on July 29, 2025, with analysts expecting earnings of $0.51 per share, representing a year-over-year decline of 16.39% [2] - The consensus estimate for revenue is $746.71 million, indicating a 1.1% decrease compared to the same quarter of the previous year [2] Fiscal Year Estimates - For the entire fiscal year, Zacks Consensus Estimates predict earnings of $2.02 per share and revenue of $2.99 billion, reflecting changes of -13.3% and -0.09% respectively from the previous year [3] - Recent changes to analyst estimates for Ares Capital indicate the dynamic nature of near-term business trends, with positive revisions suggesting analyst optimism about profitability [3] Valuation Metrics - Ares Capital currently has a Forward P/E ratio of 11.14, which is a premium compared to the industry average Forward P/E of 8.9 [6] - The Financial - SBIC & Commercial Industry, part of the Finance sector, has a Zacks Industry Rank of 239, placing it in the bottom 4% of over 250 industries [6] Analyst Ratings - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), currently rates Ares Capital at 4 (Sell) [5] - Over the last 30 days, the Zacks Consensus EPS estimate has decreased by 0.42% [5]

Market Overview - The BDC market (BIZD) has experienced significant volatility in recent months, mirroring the fluctuations seen in major stock indices such as the S&P 500 (SPY) and the Nasdaq-100 (QQQ) [1] Professional Background - Roberts Berzins has over a decade of experience in financial management, assisting top-tier corporates in shaping financial strategies and executing large-scale financings [2] - He has contributed to institutionalizing the REIT framework in Latvia to enhance the liquidity of pan-Baltic capital markets [2] - His policy-level work includes developing national SOE financing guidelines and frameworks for channeling private capital into affordable housing [2] - Berzins is a CFA Charterholder and holds an ESG investing certificate, with experience from an internship at the Chicago Board of Trade [2] - He is actively involved in thought-leadership activities aimed at supporting the development of pan-Baltic capital markets [2]

Core Insights - The iShares Core High Dividend ETF (HDV) and Schwab U.S. Dividend Equity ETF (SCHD) have slightly underperformed compared to the S&P 500 over the past five years [1] - The focus is on constructing investment portfolios that generate additional income through dividends by identifying companies with competitive advantages and strong financials [1] - A well-diversified portfolio across various sectors and industries is emphasized to minimize volatility and mitigate risk [1] Investment Strategy - The investment strategy combines high Dividend Yield and Dividend Growth companies to reduce dependence on broader stock market fluctuations [1] - Companies with a low Beta Factor are suggested to further reduce overall investment risk [1] - The selection process for high dividend yield and growth companies is meticulously curated, prioritizing total return, which includes both capital gains and dividends [1] Portfolio Composition - Suggested investment portfolios consist of a blend of ETFs and individual companies, emphasizing broad diversification and risk reduction [1] - The approach aims to maximize returns while considering the full spectrum of potential income sources [1] - The goal is to generate extra income through dividends while reducing risk through diversification [1]

Group 1: Ares Capital - Ares Capital is the largest publicly traded business development company (BDC) with over $17 billion invested since 2004, focusing on middle-market companies with annual revenues between $10 million and $1 billion [3][4] - The company offers a forward dividend yield of 8.63% and has maintained or grown its dividend for 63 consecutive quarters [3][4] - Ares Capital targets a total addressable market of approximately $5.4 trillion, benefiting from a shift towards private capital, and has a diversified portfolio with strong industry relationships and risk management [4][5] Group 2: Enterprise Products Partners - Enterprise Products Partners is a master limited partnership (MLP) leading the North American midstream energy industry, operating over 50,000 miles of pipeline [6][7] - The company has a forward distribution yield of 6.81% and has increased its distribution for 26 consecutive years [7][8] - Demand for oil and gas, particularly natural gas, is expected to grow for decades, ensuring strong demand for Enterprise Products Partners' pipelines [8][9] Group 3: Verizon Communications - Verizon Communications is a major telecommunications company serving millions globally, with a forward dividend yield of 6.22% and a history of increasing dividends for 18 consecutive years [10][11] - The company is expected to maintain its relevance in the market due to the high capital requirements for new competition in wireless services [11][12] - With the upcoming 6G technology, Verizon is anticipated to be a significant player, potentially leading to impressive growth opportunities in the future [12]

Core Viewpoint - Small business sentiment is improving, driven by the adoption of AI tools like ChatGPT, which are enabling entrepreneurs to compete effectively against larger brands [3][5]. Small Business Sentiment - The NFIB Small Business Optimism Index saw a significant decline in April but has since rebounded, with positive sentiment reported for two consecutive months [3]. - Entrepreneurs are increasingly utilizing AI for various business functions, leading to enhanced productivity and optimism [4][5]. Investment Opportunities - Ares Capital (ARCC) and Main Street Capital (MAIN) are highlighted as two attractive dividend stocks benefiting from the growth in small business lending [7][16]. - ARCC is the largest BDC with over $22 billion in assets, allowing it to secure favorable loan terms and maintain a low percentage of non-performing loans at 1.5% [8][9]. - MAIN focuses on lending to smaller, growing companies with annual revenues between $25 million and $500 million, maintaining a diverse portfolio across 190 companies [11][14]. Dividend Performance - ARCC offers a dividend yield of 8.8%, supported by its net investment income, while MAIN provides a yield of 7.2% with a history of increasing dividends [10][16]. - MAIN has increased its total dividends from $1.50 per share in 2009 to $4.11 per share in the previous year, reflecting a 174% increase over 15 years [15]. Market Outlook - The blended yield of ARCC and MAIN is currently 8.1%, with expectations for dividend growth as small business sentiment remains positive [17].

Group 1 - Samuel Smith has extensive experience in dividend stock research and investment, having served as lead analyst and Vice President at notable firms [1] - He is a Professional Engineer and Project Management Professional with degrees in Civil Engineering & Mathematics and a Master's in Engineering focused on applied mathematics and machine learning [1] - Samuel leads the High Yield Investor investing group, collaborating with Jussi Askola and Paul R. Drake to balance safety, growth, yield, and value [2] Group 2 - High Yield Investor provides real-money core, retirement, and international portfolios, along with regular trade alerts and educational content [2] - The service includes an active chat room for investors to engage and share insights [2]

Core Insights - The article discusses three dividend stocks: Ares Capital, W.P. Carey, and Realty Income, highlighting their high yields and strong track records in maintaining and increasing dividends [1][3]. Ares Capital - Ares Capital is the largest publicly traded business development company (BDC) with a $27 billion portfolio yielding an average of 9.8% [4]. - The company offers an 8.7% quarterly dividend yield, with a history of stable or rising payouts since 2009 [5]. - Ares Capital has a low nonaccrual rate of 0.9% in its investment portfolio, supported by a well-experienced underwriting team [6][7]. W.P. Carey - W.P. Carey is a diversified real estate investment trust (REIT) that has faced pressure after spinning off its office portfolio in 2023, resulting in a 19.7% dividend reduction [8][9]. - The REIT has a history of raising dividends, currently offering a 5.7% yield, with expectations for significant growth in the future [10]. - Management projects adjusted funds from operations (FFO) between $4.82 and $4.92, sufficient to cover its annualized dividend commitment of $3.60 [11]. Realty Income - Realty Income is a diversified REIT with a strong history of profit growth and a 5.7% yield, having raised its monthly dividend for the 131st time since its IPO in 1994 [12][13]. - The company operates 15,627 commercial properties across eight countries and recently issued €1.5 billion in notes at an effective rate of 3.7% [14]. - Realty Income's business model includes leasing back properties, providing a steady stream of income and potential for future dividend increases [15].

Core Viewpoint - The article emphasizes the growing interest in dividend stocks, particularly for investors approaching retirement, highlighting the appeal of regular income and reinvestment opportunities. Group 1: Ares Capital - Ares Capital is the largest publicly traded business development company (BDC) and provides direct loans to private middle-market companies in the U.S. [3] - The stock is affordable with a share price under $22 and a forward price-to-earnings ratio of 10.7 [3][4]. - Ares Capital has a forward dividend yield of 8.95% and has paid stable to growing dividends for 63 consecutive quarters [4]. - The total addressable market for Ares Capital is estimated at $5.4 trillion, positioning the company well for market growth [5]. Group 2: Enbridge - Enbridge is a leading player in the midstream energy industry, operating extensive crude and natural gas pipelines, and is the largest natural gas utility in North America [6]. - The company's diversified operations make it resilient across economic cycles, with less than 1% of EBITDA linked to commodity prices and approximately 80% protected from inflation [7]. - Enbridge has increased its dividend for 30 consecutive years, with a forward dividend yield of 6.07% and a distributable cash-flow payout ratio between 60% and 70% [8]. Group 3: Enterprise Products Partners - Enterprise Products Partners is another midstream energy leader, operating over 50,000 miles of pipeline and owning various energy assets [11]. - The company has a strong resilience, with around 90% of long-term contracts protected from inflation, and has consistently generated strong distributable cash flow [12]. - Enterprise Products Partners has increased its distribution for 26 consecutive years, with a forward distribution yield of 6.93% [13].

It pays to be picky when it comes to dividend stocks. For one thing, they ought to generate high returns on invested capital. It also helps to have a strong balance sheet and a tax-advantaged structure that facilitates high payouts. For I am Gen Alpha. I have more than 14 years of investment experience, and an MBA in Finance. I focus on stocks that are more defensive in nature, with a medium- to long-term horizon. iREIT+HOYA Capital is the premier income-focused investing service on Seeking Alpha. Our focus ...