The Motley Fool·2025-12-17 08:43Core Viewpoint - Ares Capital and Verizon Communications are highlighted as attractive dividend stocks for income investors, with Ares Capital currently being favored due to its higher dividend yield and favorable growth prospects [1][14]. Ares Capital - Ares Capital boasts an ultra-high dividend yield of 9.5% and has maintained stable or increasing quarterly dividends for 16 consecutive years [3][4]. - The company operates in a total addressable market estimated at approximately $5.4 trillion, with direct lending gaining popularity among borrowers [5]. - Ares Capital has outperformed its peers in terms of annualized total returns with lower volatility since its IPO in 2004 [6][8]. - Recent indications from CEO Kort Schnabel suggest a positive outlook, with an increase in transaction volume under review compared to previous periods [9]. Verizon Communications - Verizon offers a forward dividend yield of 6.8% and has increased its dividend for 19 consecutive years, supported by a rise in free cash flow from $14.5 billion to $15.8 billion year-over-year [10][12]. - Despite facing high competition and subscriber churn, Verizon's business is growing, and the new CEO plans to transform the cost structure for sustainable returns [12][13]. - Verizon is positioned as a leader in developing high-speed 6G technology, which is expected to be available by 2030, potentially enhancing its growth prospects [13]. Comparison - Ares Capital is considered the better dividend stock at the moment due to its higher dividend yield and more favorable growth outlook compared to Verizon [14]. - Both companies are recommended for income investors, allowing for diversification within high-yield dividend stocks [15].