Ares Capital Corporation (ARCC) — Dividend Yield, NAV & Valuation Analysis
ARCC · NASDAQ
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Overview
Ares Capital Corporation is one of the largest and most diversified publicly traded business development companies. The company provides senior secured loans, mezzanine debt, and equity investments to middle-market companies across a range of industries. With a portfolio of over $20 billion and a track record dating back to 2004, ARCC is widely considered the bellwether BDC.
Key Metrics
| Metric | Value |
|---|---|
| 1-Year Total Return | 15.4% |
| 3-Year Total Return | 41.2% |
| 5-Year Total Return | 58.7% |
| Expense Ratio | 8.5% |
| Leverage Ratio | 1.28x |
| Portfolio Companies | 200 |
| Total Assets | $23.5B |
Discount / Premium to NAV
| Stock Price | $21.45 |
| NAV per Share | $19.38 |
| Premium / (Discount) to NAV | 10.7% |
| Implied per-share NAV gap | $-2.07 |
The premium / discount to NAV compares the current stock price to the per-share net asset value of Ares Capital Corporation's investment portfolio. A negative reading (a discount) means the market is pricing ARCC below the value of its underlying assets and is one of the most-watched valuation metrics for any BDC. A positive reading (a premium) means the market is paying a premium over the stated NAV, often reflecting confidence in future dividend coverage and portfolio credit quality. Ares Capital Corporation currently trades at a 10.7% premium to NAV.
Investment Strategy
Ares Capital Corporation focuses on senior secured loans, mezzanine debt in the technology, healthcare, business services sectors. The company targets middle-market companies and maintains a portfolio of 200 investments totaling $23.5B in assets.
Management
CEO: Kipp deVeer | Employees: 325
Suitability
ARCC is suitable for income-focused investors seeking quarterly dividend income with a 9.2% yield. The BDC's focus on senior secured loans provides portfolio characteristics. Investors should consider their risk tolerance and investment objectives before investing.