Ares CapitalNASDAQ: ARCC

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 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.

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.

The difference between a lifelong holding and a seasonal holding is the forethought and quality of the management team. Income through all seasons is essential, not income just only in good times. Keep quality blue chip investments in your sights, don't get distracted by flashy ones.

Ares Capital Corporation easily covered its $0.48 per share quarterly dividend with net investment income in Q3, ensuring a high margin of safety for passive income investors. The BDC's robust new investment commitments and strong loan quality contribute to a positive net investment income outlook, despite potential headwinds from lower short-term interest rates. Ares Capital's stock trades at a 6% premium to net asset value, which is reasonable given its high portfolio quality and consistent dividend pay-out metrics.

With yields above 9%, these stocks could accelerate your retirement timeline.