Amid ongoing market volatility, Ares Capital continues to demonstrate operational consistency. The prominent business development company has maintained its regular quarterly dividend distribution, though shareholders may question whether this reliable income stream sufficiently compensates for recent share price weakness. Income-focused investors are now examining whether the equity offers value beyond its appealing yield.
Financial Resilience Through Strategic Capital Management
Ares Capital has strengthened its financial position through proactive capital market activities. In early September, the company successfully placed a $650 million bond offering carrying a 5.100% interest rate. More significantly, the firm maintains approximately $6.5 billion in available liquidity—a substantial buffer that could prove crucial for future investment opportunities and navigating potential market disruptions.
The company’s diversified investment approach forms the bedrock of its strategy. Ares Capital manages a portfolio valued at roughly $27.9 billion spread across 566 companies operating in 25 distinct industries. Last quarter, the organization originated $2.6 billion in new investment commitments while simultaneously divesting $2.0 billion worth of holdings. Its modest non-accrual rate of 2.0% at cost remains below historical averages.
Should investors sell immediately? Or is it worth buying Ares Capital?
Quarterly Performance Underpins Shareholder Returns
Recent financial results provide solid footing for the company’s consistent distribution policy. For the second quarter of 2025, Ares Capital delivered stable core earnings of $0.50 per share, achieving an annualized return on equity of 10%. The organization reported gross investment income of $745 million, with net investment income reaching $342 million. This robust performance highlights the company’s capacity to generate profitable returns despite challenging market conditions.
The critical question for market participants remains whether the combination of reliable dividends, financial strength, and portfolio diversification can reverse the stock’s downward trajectory. For investors with long-term horizons, the current period of share price weakness might present an attractive entry point—provided the fundamental business metrics remain sound.
Ad
Ares Capital Stock: Buy or Sell?! New Ares Capital Analysis from October 1 delivers the answer:
The latest Ares Capital figures speak for themselves: Urgent action needed for Ares Capital investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from October 1.
Ares Capital: Buy or sell? Read more here...
