Is Ares Capital Corporation Stock a Buy?
Ares Capital Corporation (NASDAQ: ARCC) boasts an ultrahigh dividend yield of 9.8%, making it a popular choice among income investors. The company primarily lends to underserved midsize businesses in the U.S. and benefits as high interest rates help it earn even higher returns on its loans.
The stock has delivered solid returns for long-term investors for more than two decades, largely because of its dividend. However, the stock isn't without risks, as economic conditions and interest rates can have a significant impact on its business. In this article, I'll discuss Ares Capital's business, the headwinds it may face, and whether the stock is appropriate for your portfolio.
Ares Capital is a specialty finance company that makes loans to middle-market companies. It defines middle-market companies as those with earnings before interest, taxes, depreciation, and amortization (EBITDA) between $10 million and $250 million.
Source Fool.com
