How Samuel Smith Analyzes Stocks on Seeking Alpha | High Yield Investor

Core Insights - The article discusses the investment analysis process using Seeking Alpha, focusing on Ares Capital Corporation (ARCC) and the Schwab U.S. Dividend Equity ETF (SCHD) as examples of income-focused investments. Ares Capital Corporation (ARCC) - ARCC has an attractive dividend yield of 8.56%, which is appealing for income-focused investors [2] - The stock trades at 1.13 times its book value, indicating a 13% premium to the private market value of its underlying assets [3] - Compared to peers, ARCC trades at an 11.73% discount, while the sector median trades at a 1.28 times premium [4] - ARCC's current valuation is at a 6.2% premium to its five-year average of 1.06 times, suggesting it may be expensive relative to its historical valuation [4] - The qualitative factors of ARCC and its peers should be considered for a comprehensive evaluation [5] - The stock has shown high total returns since its public offering over 20 years ago, indicating it is a strong long-term investment [7] - ARCC's dividend yield is slightly lower than its five-year average, aligning with its premium book value [6] Schwab U.S. Dividend Equity ETF (SCHD) - SCHD has a low expense ratio, making it an attractive option for cost-conscious investors [9] - The ETF has 103 total holdings, indicating good diversification, but over 40% of the portfolio is concentrated in the top 10 holdings [11] - SCHD has a D rating for momentum due to poor recent performance, but it maintains an A+ rating for expense ratios and dividend track record [13][14] - The ETF offers a trailing 12-month dividend yield of 3.71% and has a 13-year streak of dividend growth, showcasing its reliability as a dividend growth investment [15] - SCHD's expense ratio is among the best in its sector, and its long-term total return performance is commendable despite recent underperformance [16]