Ares Capital's NAV, Sector Valuation, And Dividend Vs. 14 BDC Peers

SummaryPart 2 of this article compares ARCC’s recent dividend per share rates, yield percentages, and several other highly detailed dividend sustainability metrics to 14 BDC peers.This includes a comparative analysis of ARCC’s cumulative undistributed taxable income ratio, percentage of floating-rate debt investments, recent weighted average annualized yield, and weighted average interest rate on outstanding borrowings.My current ARCC buy, sell, or hold recommendation, price target, and dividend sustainability projection through the fourth quarter of 2022 are stated in the “Conclusions Drawn” section of the article.Simply put, contrary to recent speculation, ARCC’s dividend remains very safe. In addition, with the recent market sell-off, ARCC is now within my/our STRONG BUY recommendation range.Most BDC peers continue to have sustainable dividends over the foreseeable future. That said, credit risk will eventually rise heading into 2023. This is a trend I continually monitor.I do much more than just articles at The REIT Forum: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »Focus of Article:

The focus of this two-part article is a very detailed analysis comparing Ares Capital (NASDAQ:ARCC) to some of the company’s business development company (“BDC”) peers (all sector peers I currently fully cover). I am writing this two-part article due to the continued requests that such an analysis be specifically performed on ARCC and some of the company’s BDC peers at periodic intervals. For readers who just want the summarized conclusions/results, I would suggest to scroll down to the “Conclusions Drawn” section at the bottom of each part of the article.

PART 1 of this article analyzed ARCC’s recent quarterly results and compared several of the company’s metrics to 14 BDC peers. PART 1 helps lead to a better understanding of the topics and analysis that will be discussed in PART 2. The link to PART 1’s analysis is...