Buying dividend-paying stocks might be the easiest way there is to build a stream of passive income. Ares Capital is the largest publicly traded business development company and it's more reliable than its ultra-high dividend yield suggests.
Ares Capital (ARCC) is a high-quality BDC with a diversified loan portfolio and strong track record, making it a solid choice for high-income portfolios. ARCC's financials are robust, with a 12% IRR on its $25 billion portfolio and a well-covered 9.4% dividend yield. Despite potential risks from falling interest rates, ARCC's credit hedging and floating-rate debt offer some protection, though dividends may dip a little bit.
Recently, Zacks.com users have been paying close attention to Ares Capital (ARCC). This makes it worthwhile to examine what the stock has in store.
With the Federal Reserve kickstarting a new rate-cutting cycle, dividend stocks have become even more attractive. On Wednesday, the Fed made a hefty 50 basis points cut, surprising many who had anticipated a more modest 25 basis point reduction.
Ares Capital's earnings are influenced by interest rates and leverage, with a bias towards higher earnings under higher rates. ARCC management has been reinvesting earnings to support future growth, aiming to sustain and potentially increase the $0.48 dividend. Ares Capital's taxable income spillover and strong market environment suggest continued earnings above the dividend, with potential for future dividend increases.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Ares Capital (ARCC) closed at $20.17 in the latest trading session, marking a -0.79% move from the prior day.
Ares Capital (ARCC) closed at $20.33 in the latest trading session, marking a -0.2% move from the prior day.
High-yield stocks have rebounded due to optimism over Federal Reserve rate cuts. However, there remain several high-quality high-yield stocks that have lagged the sector's recovery and remain attractive bargains. We discuss some of them in this article.
Ares Capital (ARCC) closed at $20.57 in the latest trading session, marking a +0.24% move from the prior day.
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.
Ares Capital offers a well-covered 9.7% dividend yield, supported by solid net investment income and a declining percentage of riskiest investments. The portfolio shows improvement with a decrease in Grade 2 investments and low non-accrual rates, indicating strong performance in a high-interest rate environment. ARCC's quarterly dividend is sustainable with a 120% NII coverage ratio, though unlikely to increase soon due to potential interest rate cuts.