Ares Capital Corp (ARCC)

Price$20.08Cached quoteAs of 2026-09-04 16:23 UTC

AI: Fair-priced

Price checkThe shares look fairly priced because their high income yield is offset by weakening credit cushions.

At the observed market level, the shares trade at about 1.03 times June net asset value and roughly 10.3 times the last four quarters of core earnings. The regular dividend implies a yield near 9.6%, while those four quarters of core earnings cover about 99% of the annualized payout. That is attractive income, but not a deep discount: June net asset value fell 3.0% from year-end and loans no longer paying expected interest increased. The evidence therefore supports Fair-priced, not a clear bargain or excess. SEC+1

Big pictureIncome remains resilient, but lower rates and credit losses could steadily reduce the dividend cushion.

Revenue rose from $1.51 billion in 2020 to $3.05 billion in 2025, and dividends paid rose from $679 million to $1.26 billion. For a lender, reported operating cash flow is noisy because making loans uses cash, so recurring investment income is the better durability check. In the second quarter, net investment income was $359 million, or $0.50 per share, versus $342 million a year earlier, while core earnings slipped to $0.47 from $0.50. With 71% of income-producing securities floating-rate, falling base rates can gradually reduce asset income. SEC+1

Business strengthLarge scale, secured lending and ample liquidity help absorb stress, while past share issuance was mostly constructive.

At June quarter-end, Ares Capital had $29.35 billion of investments across 619 companies, with 59% in first-lien senior secured loans, which rank first on pledged collateral. Debt was about 1.15 times equity, and management reported roughly $6.0 billion of available liquidity after a July note repayment. Shares outstanding rose about 70% from 2020 through 2025, but stockholders’ equity nearly doubled; book value per share rose from about $16.96 to $19.94. That suggests issuance generally expanded the capital base without obvious per-share destruction. SEC

What could change the storyStable credit and dividends make the yield attractive; rising defaults or faster rate cuts would break that case.

The bull case needs core earnings near the current quarterly pace, book value to stabilize, and the regular dividend to remain covered; a $1.5 billion investment backlog and new July investments yielding about 10% support that possibility. The bear case is concrete: non-accrual loans rose to 2.4% of cost from 1.8% at year-end, and private-credit defaults reached a sector record 6.0%. If credit marks keep cutting book value or floating-rate income falls faster than funding costs, a price near book value would offer too little protection. SEC+1

AI: News

Second-quarter earnings and dividendCore earnings held steady enough to support the dividend, but book value and credit quality weakened.

On July 29, Ares Capital reported second-quarter core earnings of $0.47 per share and kept the quarterly dividend at $0.48. Net asset value fell to $19.35 from $19.94 at year-end, while non-accrual loans rose to 2.4% of cost. Shares fell about 2% on the earnings date, but that timing alone does not prove the report caused the move. The mix mattered: income stayed resilient while unrealized losses and credit stress increased. SEC+1

Commercial paper programA new short-term funding channel could lower borrowing costs and preserve flexibility if markets remain open.

On June 8, Ares Capital announced an inaugural commercial paper program allowing up to $1.0 billion of short-term unsecured notes, backed by capacity under its $5.5 billion revolving credit facility. The company said it expected cost benefits versus other funding sources. Lower funding costs can protect the spread between what Ares Capital earns on loans and what it pays to finance them, especially as asset yields decline. The benefit depends on continued access to the commercial paper market. SEC+1

Credit facility extensionA larger, longer bank facility reduced near-term refinancing pressure and strengthened the company’s liquidity backstop.

On May 21, Ares Capital increased its main secured credit facility from about $5.31 billion to $5.48 billion and extended most revolving commitments to May 2030, with stated maturities largely moving to May 2031. It also removed a 0.10 percentage-point credit-spread adjustment from the base rate calculation. This does not eliminate leverage risk, but it improves funding duration and flexibility, which matters for a lender holding long-lived private loans and supporting a high dividend. SEC+1

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Revenue

2020

2021

2022

2023

2024

2025

Net income

2020

2021

2022

2023

2024

2025

Free cash flow

No reported data

Total cash / debt

CashTotal debt

2020

2021

2022

2023

2024

2025

Financial statements

	2025	2024	2023	2022	2021	2020
Revenue	$3.05B	$2.99B	$2.61B	$2.10B	$1.82B	$1.51B
Operating expenses	$108.0M	$113.0M	$42.0M	$86.0M	—	—
Net income	$1.30B	$1.52B	$1.52B	$600.0M	$1.57B	$484.0M
Net profit margin	42.56%	50.90%	58.22%	28.63%	86.10%	32.03%
Basic EPSper basic share	$1.86	$2.44	$2.75	$1.21	$3.51	$1.14
Diluted EPSper diluted share	$1.86	$2.44	$2.68	$1.19	$3.51	$1.14

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

2.37%of listed shares

MORGAN STANLEY17.02M shares · Jun 30, 2026

View holders

Top 20 reported holders of ARCC
Holder	% owned
MORGAN STANLEY	2.37%17.02M shares
UBS Group AG	1.92%13.78M shares
VAN ECK ASSOCIATES CORP	1.85%13.31M shares
STRS OHIO	1.48%10.66M shares
BANK OF AMERICA CORP /DE/	1.24%8.94M shares
JPMORGAN CHASE & CO	1.09%7.85M shares
Generali Asset Management SPA SGR	1.05%7.55M shares
Legal & General Group Plc	0.91%6.51M shares
TWO SIGMA INVESTMENTS, LP	0.82%5.89M shares
WELLS FARGO & COMPANY/MN	0.62%4.44M shares
AMERIPRISE FINANCIAL INC	0.57%4.12M shares
LPL Financial LLC	0.56%4.03M shares
HighTower Advisors, LLC	0.54%3.87M shares
RAYMOND JAMES FINANCIAL INC	0.49%3.55M shares
Advisors Capital Management, LLC	0.47%3.41M shares
CONFLUENCE INVESTMENT MANAGEMENT LLC	0.47%3.37M shares
Evercore Wealth Management, LLC	0.42%3.01M shares
OMERS ADMINISTRATION Corp	0.40%2.91M shares
ARES MANAGEMENT LLC	0.39%2.78M shares
Sound Income Strategies, LLC	0.39%2.77M shares

Percentages use 718M shares of this listed class outstanding on Jun 30, 2026.

Gray completes the 100% scale. Reported positions may overlap; holders have different reporting dates.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys8$2.28M disclosed value

Sells (SEC code S)0$0.00 disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Feb 9, 2026Form 4	MARKOWICZ JANAChief Operating Officer	BuyCommon Stock	15.0K	$19.20	$288.0K	25.2K
Feb 6, 2026Form 4	Lem Scott CCFO and Treasurer	BuyCommon Stock	5.2K	$19.29	$100.0K	39.5K
Feb 5, 2026Form 4/A	SCHNABEL MICHAEL KORTChief Executive Officer	BuyCommon Stock	12.5K	$19.13	$239.1K	40.5K
Feb 5, 2026Form 4	HENSON MARY BETHDirector	BuyCommon Stock	4.0K	$19.14	$76.6K	31.9K
Feb 5, 2026Form 4	SCHNABEL MICHAEL KORTChief Executive Officer	BuyCommon Stock	12.5K	$19.13	$239.1K	40.5K