ARCC - Ares Capital: The BDC Market Leader Is Strong And Still Cheap (Upgrade)
2024-03-25 13:30:51 ET
Summary
- Ares Capital is a leading business development company with a well-diversified portfolio in direct lending.
- The company's exposure to software and healthcare helps mitigate risks associated with cyclical industries.
- Ares Capital's association with Ares Management provides sourcing and investment expertise, giving it a competitive edge.
- I explain why ARCC's "A" valuation grade suggests it's still not too late for BDC investors to buy more.
- ARCC's solid profitability and highly robust price action make it an enticing buy, with a forward dividend yield of 9.7%.
Ares Capital is a BDC Market Leader
Ares Capital ( ARCC ) is one of the market's leading business development companies or BDC. It has a well-diversified portfolio in direct lending and a relatively small exposure in equity investments. Ares Capital's portfolio comprises mostly floating-rate securities, accounting for 69% of its portfolio fair value. Hence, the BDC has capitalized on the rapid interest rate hikes to drive its core EPS....
Ares Capital: The BDC Market Leader Is Strong And Still Cheap (Upgrade)