Pgiam/iStock via Getty Images Ares Capital (ARCC) and Main Street Capital (MAIN) are widely recognized for being the leading blue chips in the Business Development Company (i.e., "BDC") sector (BIZD). However, right now we wouldn't want to own either of them. In this article, we explain why and share three BDCs that we like more at the moment. Why We Don't Like ARCC Stock Or MAIN Stock Right Now ARCC and MAIN are wildly popular with retirees with legions of loyal fans for good reason: They pay very attract ...

Core Viewpoint - Ares Capital Corporation is well-positioned to deliver stable net investment income in 2024, regardless of potential recession concerns, with a strong performance in the fourth quarter and a growing net asset value [2][15]. Financial Performance - In the fourth quarter, Ares Capital reported net investment income of $0.63 per share, a 7% increase QoQ, leading to a dividend coverage ratio improvement to 125% [11][12]. - The company's net asset value rose by $0.25 per share QoQ, reaching $19.24, reflecting a 1.3% increase [2][13]. - Ares Capital's portfolio value grew 4% QoQ to $22.9 billion, driven by new fundings totaling $699 million in the fourth quarter [4][5]. Credit Quality - The non-accrual ratio remained stable at 0.6% for both 3Q-23 and 4Q-23, indicating that the portfolio performed according to expectations [8][11]. - First Lien investments increased to 44%, while Second Liens decreased to 16%, with First and Second Senior Secured Loans comprising 61% of the total portfolio [4][8]. Market Environment - Federal Reserve Chair Jerome Powell indicated a cautious approach to rate cuts, suggesting a prolonged higher interest rate environment, which is favorable for Ares Capital [2][3]. - Ares Capital's portfolio is positioned with 69% floating rate, providing potential for net investment income growth in a stable or declining interest rate environment [6][15]. Investment Outlook - Ares Capital is classified as a Buy due to its consistent performance and improving credit quality, making it an attractive option for passive income investors [3][15]. - The company offers a 10% dividend yield, supported by a robust margin of safety in its dividend coverage [15].

Pick a category. You'll find some members of that category that especially stand above the rest of the pack.In the category of dividend stocks, I think Ares Capital (ARCC 0.30%) serves as a great example. The business development company (BDC) offers a dividend yield of more than 9.6%. This ultra-high-yield dividend stock looks like a no-brainer buy right now for income investors.Firing on (nearly) all cylindersAres Capital reported its fourth-quarter and full-year results on Thursday. It's fair to say the ...

Shares of Ares Capital Corporation (ARCC) gained 1.3% following the release of its fourth-quarter and 2023 results. Quarterly core earnings of 63 cents per share surpassed the Zacks Consensus Estimate of 59 cents. The bottom line was in line with the prior-year quarter’s figure.Results were primarily aided by an improvement in the total investment income. Also, the company’s portfolio activity was robust in the quarter. However, an increase in expenses hurt the results to some extent.GAAP net income was $41 ...

0 42 65 GENERAL 155 112 42 PALETTE 4 94 109 127 127 127 Credit 0 42 65 Private Equity BUSINESS 2 87 133 SECTOR PALETTE Real Estate 71 126 163 Strategic Initiative s 120 163 198 Fourth Quarter 2023 Earnings Presentation 0 42 65 Important Notice GENERAL 155 112 42 PALETTE This presentation contains “forward-looking statementsˮ within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are 4 94 109 subject t ...

Ares Capital (NASDAQ:ARCC) Q4 2023 Earnings Conference Call February 7, 2024 11:00 AM ET Company Participants John Stilmar – Partner, Co-Head of Public Markets Investor Relations Kipp DeVeer – Chief Executive Officer Penni Roll – Chief Financial Officer Kort Schnabel – Co-President, Los Angeles Conference Call Participants John Hecht – Jefferies Finian O'Shea – Wells Fargo Securities Melissa Wedel – JPMorgan Ryan Lynch – KBW Robert Dodd – Raymond James Mark Hughes – Truist Erik Zwick – Hovde Group Casey Ale ...

For the quarter ended December 2023, Ares Capital (ARCC) reported revenue of $707 million, up 10.5% over the same period last year. EPS came in at $0.63, compared to $0.63 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $684.52 million, representing a surprise of +3.28%. The company delivered an EPS surprise of +6.78%, with the consensus EPS estimate being $0.59.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and ho ...

Ares Capital (ARCC) came out with quarterly earnings of $0.63 per share, beating the Zacks Consensus Estimate of $0.59 per share. This compares to earnings of $0.63 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 6.78%. A quarter ago, it was expected that this private equity firm would post earnings of $0.58 per share when it actually produced earnings of $0.59, delivering a surprise of 1.72%.Over the last four quarters, the c ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________________________________ FORM 10-K ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File No. 814-00663 ____________________________________________________ ...

Market Overview - The Business Development Company (BDC) sector experienced a total return of 1.5% in the last week, with only two BDCs in the coverage showing negative performance month-to-date [2]. Valuation and Market Trends - Aggregate BDC valuations are currently above historical averages, supported by a delay in expected Federal Reserve interest rate cuts [3]. - GBDC is merging with its private BDC, GBDC 3, which is expected to enhance liquidity, lower fixed costs, and improve debt issuance pricing. The incentive fee for GBDC will decrease from 20% to 15%, effective January 1, which is anticipated to add $0.03-$0.04 to adjusted net income per quarter [4]. Company Specifics - GBDC's recent management and incentive fee cuts have resulted in a pro-forma 20% increase in net income, suggesting a potential revaluation of the company due to its higher forward net income [9]. - GBDC's base dividend coverage stands at 136%, indicating room for future increases even with potential Federal rate cuts [9]. Bond Issuance Activity - Ares Capital Corp (ARCC) announced a $1 billion offering of 5.875% notes due in 2029, reflecting a trend among BDCs to capitalize on declining long-term Treasury yields [7]. - The new bond issuance is a refinancing of a previous bond, which will lead to a slight increase in interest expenses for the company [8].