Exclusive Analysis: This Stock Pays A Consistent 9% Dividend Yield

Ares Capital - It pays like clockwork, grows when others shrink, and Wall Street stays oddly quiet about it

If you're looking for dividend income you can actually depend on — not just high yield for yield’s sake — Ares Capital Corp (ARCC) remains one of the most resilient, battle-tested business development companies (BDCs) in the market today.

Despite macro uncertainty and interest rate volatility, ARCC continues to deliver consistent income, modest capital growth, and portfolio-level protection that makes it a standout performer among income-generating stocks.

📊 Performance Recap: Quietly Beating the Market

The BDC space is littered with high-yield names, but few match ARCC’s consistency, underwriting discipline, and capital allocation precision. It’s no wonder it’s the largest publicly traded BDC and my largest holding in the space. Business Development Companies are exactly as the name implies: they help businesses develop strong revenues. BDCs generally produce their income from lending capital and collecting equity or interest payments in return. They typically sport much larger dividend yields than people are familiar with.

For some reason, many investors don’t even know that a sector like this exists. This is why you can benefit by being in the know. Most people see a high dividend yield of 9% and think something must be wrong. However, that is not always the case! The dividends paid by ARCC have been so stable that investors would have been able to substantially increase their income by simply remaining invested and reinvesting distributions. I ran a back test of a $25,000 and here are the results.:

2016 Dividend Income: $2,745

2024 Dividend Income: $7,458

Investors would have 3x their income!

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🧠 Portfolio Deep Dive: Growth + Defense in One Package

ARCC’s portfolio is valued at $26.7 billion, up from $22.8 billion the previous year — a sign of active growth. Management has expanded exposure from 505 to 550 portfolio companies, with a strategic emphasis on high-quality, senior secured debt.

• 57% First Lien Senior Secured Loans

• 7% Second Lien Senior Secured

• 5% Senior Subordinated

• 10% Preferred Equity

• 7% Ivy Hill Asset Management

• 9% Other Equity

Senior secured debt makes up the majority, providing top-of-the-capital-structure protection in the event of defaults. If a company goes under, ARCC gets paid before junior creditors — a key advantage in turbulent markets.

• 25% Software & Services

• 12% Health Care Equipment

• 9% Commercial Services

These three sectors represent nearly half the portfolio, so investors should watch industry shifts in these areas — but their diversity also lowers correlation risk.

💸 Dividend Sustainability: Earnings > Distributions

ARCC recently declared a $0.48/share quarterly dividend, translating to an > 9% yield.