Ares Capital Has Maintained or Raised Its Dividend for Over 16 Years. Here's What That Streak Is Built On.
The leading BDC can afford to pay its near-10% yield.
Overview
Ares Capital (NASDAQ: ARCC), the world's largest business development corporation (BDC), pays a forward dividend yield of 9.8%. That massive yield might initially seem like a red flag, but Ares has actually maintained or raised that payout for 16 consecutive years.
Image source: Getty Images.
As a BDC, Ares provides financing for "middle market" companies that struggle to secure loans from conventional banks because they're considered higher-risk clients. It's invested in 619 companies across its $29.3 billion portfolio. To reduce its risk, it allocates 59% of its portfolio to first-lien secured loans and 4% to second-lien secured loans.
Details
Source
Originally published at www.fool.com.
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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Data may be delayed up to 15 minutes. Past performance is not indicative of future results. Consult a licensed financial advisor before making investment decisions.