Time Is Running Out to Lock In This Financial Stock's Sky-High Yield

ARCC INTC ^GSPC NVDA Ares Capital (NASDAQ: ARCC) currently pays a $0.48-per-share quarterly dividend. At its recent stock price of around $19, the business development company (BDC) yields more than 10%. That s about 10 times the S&P 500 s yield, which currently sits around 1%. Investors are running out of time to lock in the financial stock s currently sky-high yield. Here s why you might want to act fast. Will AI create the world s first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue » Ares Capital announced its second-quarter dividend payment at the end of April when it reported its first-quarter financial results. The BDC will pay that dividend on June 30th. However, an investor would need to be a shareholder before the market closes on June 15. An investor who buys after that date wouldn t receive their first dividend until the third-quarter payment, which Ares has historically paid on the last day of September. Waiting to buy also risks locking in a lower yield. The REIT s share price has fallen about 8% this year, pushing its yield to around its highest level in the last five years: However, the share price has already bounced off its recent bottom, and could continue rallying, which would steadily lower the yield. While shares have fallen over the past year due to concerns about the private credit market and falling interest rates, Ares is in a strong position to navigate both headwinds. Ares Capital has paid a stable-to-growing dividend for 67 consecutive quarters. The BDC expects to continue delivering dividend sustainability going forward. While its core earnings dipped in the first quarter, falling to $0.47 per share (from $0.50 per share in both the fourth quarter and the first quarter of last year) and below the current dividend rate, its payout remains on a solid footing. Ares Capital also booked $0.15 per share in net realized gains in the first quarter, which, when added to its core earnings, resulted in total earnings well in excess of the dividend. That provides "a strong underlying foundation for current distributions," stated CEO Kort Schnabel on the first-quarter conference call. The CEO went on to note that the "foundation is further supported by ample spillover income, modest leverage, a more stable rate environment, and credit performance that aligns with our historical track record." Ares Capital carried forward $1.38 per share of excess taxable income from last year for distribution in 2026. The company also stress-tested its software-oriented portfolio to assess the AI risk of its portfolio companies, finding that 85% are at low risk. Meanwhile, only 1% of those companies are at high risk, representing about 0.3% of its total portfolio, and 14% are at medium risk, accounting for only 3% of its total loan portfolio. These factors drive the company s continued belief that the "current dividend approximates the long-run underlying earnings power of our business," the CEO stated on the call. Ares Capital will pay its next dividend at the end of the month. However, investors need to hold shares by market close on the 15th to receive that payment and lock in its current yield of more than 10%. The BDC should continue paying its current rate for the foreseeable future, making it an enticing stock for those seeking a lucrative income stream. Before you buy stock in Ares Capital, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ares Capital wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $443,191!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,258,838!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don t miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. *Stock Advisor returns as of June 7, 2026. Matt DiLallo has positions in Ares Capital. The Motley Fool has positions in and recommends Ares Capital. The Motley Fool has a disclosure policy. Time Is Running Out to Lock In This Financial Stock s Sky-High Yield was originally published by The Motley Fool

Time Is Running Out to Lock In This Financial Stock's Sky-High Yield

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