From Yahoo Finance: 2025-06-21 04:57:00

Ares Capital, a BDC managed by Ares Management, offers an 8.9% dividend yield, high compared to S&P 500 funds. The company provides loans to small businesses with limited funding options, yielding nearly 10% on investments. A diversified portfolio helps mitigate risks, but high interest rates and economic changes pose challenges.

While Ares Capital weathered the Great Recession, its stock price and dividends suffered. The BDC’s business model of high-risk lending to smaller companies requires careful consideration. Ares Capital’s success depends on economic conditions, with potential conflicts of interest and interest rate vulnerabilities affecting borrower solvency.

Investing in Ares Capital entails heightened risk due to its lending practices and economic exposure. Despite Ares Management’s support, conflicts of interest and high interest rates make the company susceptible to downturns. Risk-tolerant investors may find appeal in Ares Capital, but caution is advised given the potential challenges during economic uncertainty.



Read more at Yahoo Finance: Is Ares Capital Stock a Buy Now?