
At the 24% federal bracket, a $50,000 stream of ordinary dividend income hands roughly $12,000 to the IRS every year.
Ares Capital Corporation (ARCC) is a prominent publicly traded business development company that focuses on delivering tailored financing solutions to middle-market firms across diverse sectors. The company employs a dual investment strategy that integrates both debt and equity investments, aiming to achieve strong risk-adjusted returns while prioritizing capital preservation. Backed by the extensive expertise of Ares Management Corporation, ARCC's disciplined credit analysis and diversified investment portfolio position it to capitalize on growth opportunities and enhance long-term shareholder value in the evolving private equity landscape.
| Revenue (TTM) | $3.11B |
| Gross Profit (TTM) | $3.11B |
| EBITDA | — |
| Operating Margin | 75.60% |
| Return on Equity | 6.88% |
| Return on Assets | 4.94% |
| Revenue/Share (TTM) | $4.34 |
| Book Value | $19.35 |
| Price-to-Book | 1.03 |
| Price-to-Sales (TTM) | 4.54 |
| EV/Revenue | 25.59 |
| EV/EBITDA | 10.19 |
| Quarterly Earnings Growth (YoY) | -54.10% |
| Quarterly Revenue Growth (YoY) | 3.10% |
| Shares Outstanding | $718.02M |
| Float | 0 |
| % Insiders | 0.56% |
| % Institutions | 35.96% |
Volatility is currently expanding

At the 24% federal bracket, a $50,000 stream of ordinary dividend income hands roughly $12,000 to the IRS every year.

Default rates are hitting recent highs, and internal reviews of loan health point to tougher times ahead, a WSJ analysis shows.

Ares Capital delivered a 1.3% total NAV return in Q2, with idiosyncratic credit markdowns driving subdued performance. ARCC trades at a 3% discount and 10.2% dividend yield, but dividend coverage is slightly below 100%. Portfolio quality remains solid, with diversified exposure and robust software sector performance.

Ares Capital reported Q2 earnings reflecting rising macro risks but maintains strong fundamentals and dividend safety for now. Net investment income fell to $0.50, with dividend coverage declining to 104%, yet portfolio growth and diversification remain robust. Non-accruals increased to 2.4% on cost, but management's spillover income and modest leverage support near-term dividend stability.

Ares Capital delivered mid-single-digit net investment income growth in Q2, supported by a growing portfolio value and higher net interest income. ARCC remains focused on first and second liens. Rate cuts pose a medium-term risk given that the BDC is 71% invested in variable rate-paying loans. Dividend coverage remains robust at 104%, with a long history of uninterrupted payments. Non-accruals, however, are slightly rising and currently stand at 1.4%, based on FV.

Ares Capital has been gradually declining for many quarters now. ARCC is my largest BDC position, and I continue adding regularly. Q2 results were great with stable non-accruals, great net investment income compared to peers, and above-average dividend coverage.

Ares Capital meets Q2 earnings estimates, but rising expenses and unrealized losses weigh on results even as investment income improves.

Big 10%+ yield BDC, Ares Capital, just announced fairly positive quarterly results, despite increasing industry challenges. After reviewing the current BDC market environment, this report ranks 20 top BDCs into three distinct tiers, including a special focus on ARCC. The report concludes with a strong opinion on investing in BDCs as the overall industry matures and investing in ARCC in particular.

ARCC highlights scale, improving lending terms and balance sheet flexibility as it navigates a slower transaction market.

Ares Capital (ARCC) Q2 2026 Earnings Call Transcript
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