Ares Capital (ARCC) reported earnings 30 days ago. What's next for the stock?
Zacks.com users have recently been watching Ares Capital (ARCC) quite a bit. Thus, it is worth knowing the facts that could determine the stock's prospects.
ARCC's portfolio risk has improved, with a decline in Grade 2 risk from 3% to 2.2%, indicating better recovery prospects. No further decline in Grade 4 risk, which represents the lowest risk and reflects strong performance and positive trends. Overall, ARCC maintains a strong portfolio with limited risk of substantial non-accruals in the near term.
24/7 Wall St. Insights The lower interest rates go, the more investors will shift to ultra-high-yield stocks.
When investing for 10%+ BDC yields, investors have to pay extra attention to leverage, dividend coverage, and portfolio quality. Going into Q3, 2024 earnings season, my expectation was that we would see elevated volatility levels and falling NII results. While the actual results have been mostly positive for high-quality BDCs (and even for some speculative picks), many risks remain open.
Ares Capital improved its high balance sheet quality in Q3 and supports its dividend with NII, making it a reliable high-yield investment. The BDC's portfolio grew with $3.9B in gross commitments, showing 145% Y/Y growth. The non-accrual percentage dropped Q/Q to just 0.6% of investments (FV).
Ares Capital Corp and Blue Owl Capital Corp are both high-quality, high-yield BDCs. I compare them side-by-side in this article. I share why only one is a buy right now.
This Ultra-High-Yield Dividend Stock in Warren Buffett's Secret Portfolio Is a No-Brainer Buy
Closed-end funds are special income vehicles, with many positive aspects and just as many weaknesses that take time to be properly understood and evaluated. I discovered their existence about ten years ago, and over time, I became convinced of their worth by developing a personal method of selection based mainly on NAV performance. This is an analytical, data-driven approach which I then extended to other types of securities in my portfolio, namely ETFs and BDCs.
Ares Capital (ARCC) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
TipRanks' analyst ranking service pinpoints Wall Street's best-performing stocks, including IBM and Ares Capital.
A relatively small amount of cash will go a long way with these three dividend stocks.