Ares Capital: Higher Dividend Yields Boost Its Minimal Margin Of Safety

Summary

• Dividend yields of 10.2% may be witnessed by 2024, for opportunistic investors who continue to load up at current levels. Otherwise, a stellar 11.8% yield at $16.84.
• These numbers are definitely impressive, against its 4Y average yield of 9.28% and sector median of 3%, despite the recent 12.88% stock recovery.
• Combined with the continued expansion of its EPS and stellar operating efficiencies, we may see ARCC outperform ahead, despite the reduced margin of safety.
• Naturally, only for the brave who dared to jump in now.

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Investment Thesis

ARCC YTD Stock Price

The Ares Capital (NASDAQ:ARCC) stock is trading at $18.66, nearing its pre-pandemic peaks and down -18.86% from its 52 weeks high of $23.00. However, due to the recent 12.88% recovery from 52 weeks low of $16.53, it is apparent

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The analysis is provided exclusively for informational purposes and should not be considered professional investment advice. Before investing, please conduct personal in-depth research and utmost due diligence, as there are many risks associated with the trade, including capital loss.