ARCC

Ares Capital (ARCC) is trading at a multi-decade low valuation, and I'm upgrading the stock to a Strong Buy for its compelling risk/reward profile. ARCC's 10.3% dividend yield is well-supported by net investment income, with total annualized returns estimated at 18.4% through 2030. Concerns over ARCC's 70% software/adjacent exposure are mitigated by management's focus on foundational, sticky business infrastructure software.

With the Federal Reserve's benchmark funds rate parked at 3.75% since Dec. 11, 2025, and the 10-year Treasury offering just 4.38%, income investors entering July are still hunting for yield well above the risk-free rate.

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?

Externally managed BDCs have to meet a high bar to qualify for a durable income portfolio. Their fees and sub-optimal incentives provide a structural headwind for long-term compounding. In my portfolio, I hold 2 externally managed BDCs that have passed the test.

Replacing a $70,000 salary with dividend income comes down to one variable: yield.

NEW YORK, July 2, 2026 /PRNewswire/ -- Ares Capital Corporation ("Ares Capital") (NASDAQ: ARCC) announced today that it will report earnings for the second quarter ended June 30, 2026 on Wednesday, July 29, 2026 prior to the opening of the Nasdaq Global Select Market. Ares Capital invites all interested persons to attend its webcast/conference call at 12:00 p.m.

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.

When I was a younger investor, I tended to buy stocks with dividend yields of 10% or more. Overall, thanks to diversification, I made out OK, but I was burned more than once by dividend cuts.

Ares Capital is upgraded to "Strong Buy" due to its attractive valuation and near-11% dividend yield. ARCC trades at a 9% discount to book value, with a well-diversified $29.5 billion portfolio and low nonaccruals supporting downside protection. Risks from AI-related software exposure exist, but ARCC's prudent underwriting and scale offer resilience in a volatile market.

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price.