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.
24/7 Wall St. Insights The futures market has priced a 100% chance 25-basis-point cut in federal funds in September.
24/7 Wall Street Insights The current high interest environment has fueled the growth of the private credit market from $875 billion to over $1 trillion in a short time, with a projected $2.8 trillion market by 2027-28.
The stock market has experienced some outsize selling activity as investors digest a multitude of factors including mixed economic data and ever-changing forecasts for the upcoming election. Dividend stocks can be a good source of passive income and help bolster your cash position.
ARCC is a blue-chip BDC with an extremely impressive track record. OCSL has a choppier track record but is managed by one of the most reputable credit investors, Oaktree. We compare them side-by-side and share our thoughts on which is a Buy and which is not.
Ares Capital's business model focuses on lending to small- and medium-sized enterprises, with investments mainly in senior secured notes and diversified sector exposure. Despite the rising interest rates, Ares Capital's dividend remains well-covered due to the company's secure spread between investment income and interest expenses. The company's weighted average interest rate on debt has increased from 4.88% to 5.31%, driven by the issuance of higher-rate floating debt, potentially impacting future income.
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.
24/7 Wall St. Insights Stocks that consistently raise their dividends offer investors huge total return potential.
Despite recession fears, I plan to hold Business Development Companies due to their strong fundamentals despite being considered riskier investments. Unemployment has risen, fueling recession fears, but I believe the economy is just slowing as interest rate hikes are being felt throughout the economy. Ares Capital and Blackstone Secured Lending are two BDCs that, I think, should fare better in a recession for the reasons listed in the article.
The investments Pfizer made with buckets of COVID-19 profits could allow its 15-year, dividend-raising streak to continue. PennantPark Floating Rate Capital is a business development company that offers a dividend yield above 11% at recent prices.
ARCC delivered a solid 2.9% total NAV return over the quarter. It trades at a 9.2% dividend yield and 11.7% core earnings yield. Portfolio sector allocation includes software and healthcare, with a focus on larger companies and lower first-lien portfolio compared to average BDCs. Core net investment income increased due to higher leverage and a jump in fees.
24/7 Wall St. Insights Interest rates have plunged, and dividend stocks got hit during the sell-off.