Ares Capital offers strong margins and a 10.1% dividend at a forward P/E of 9.9x, but the price already sits 4.4% above the analyst target and revenue is declining, so adding is not compelling.
Thesis pillars
- High Dividend Income↑Improving
- Strong Margins Cheap Multiple→Stable
- Analyst Target Already Reached↑Improving
- +2 more pillars — see the Why tab for full reasoning
Pillars as of Nov 1, 2026, based on the 10-K filed Feb 4, 2026
Ares Capital Corporation (ARCC) Stock Analysis
Breakout setup
Financial Services · Asset Management
Hold if already holding. Not a fresh buy at $19.46, but acceptable to hold if already in. Reasons: Concentration risk — Counterparty: Ares Capital Management; Analyst target reached - limited upside remaining.
Ares Capital Corporation is the largest publicly traded BDC by market cap, with approximately $31.2 billion of total assets at December 31, 2025, invested primarily in first and second lien senior secured loans to U.S. middle-market companies. The company is externally managed... Read more
Hold if already holding. Not a fresh buy at $19.46, but acceptable to hold if already in. Reasons: Concentration risk — Counterparty: Ares Capital Management; Analyst target reached - limited upside remaining. Chart setup: Golden cross, above all MAs, RSI 58, MACD bullish. Maintain position. Not compelling to add more. Score 6.0/10, moderate confidence.
Passes 7/8 gates (positive momentum, clean insider activity, no SEC red flags, news events none recent, earnings proximity 90d clear, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio. Suitability: moderate.
About Ares Capital Corporation
About Ares Capital Corporation
Ares Capital Corporation held approximately $31.2 billion of total assets at December 31, 2025, ranking as the largest publicly traded BDC by market capitalization. Ares Capital invests primarily in first and second lien senior secured loans, subordinated debt, preferred equity, and equity securities of U.S. middle-market companies with annual EBITDA between $10 million and $250 million. The company's wholly owned portfolio company, Ivy Hill Asset Management, managed 23 investment vehicles with approximately $14.6 billion of assets under management at year-end.
Ares Capital Management LLC, a subsidiary of publicly traded Ares Management Corporation, manages all investment activities for a base management fee on total assets, an income-based fee on net investment income, and a capital gains incentive fee. Investment sizes in corporate borrowers typically range between $30 million and $500 million, structured as first lien secured loans with three-to-ten year terms. The portfolio is broadly diversified across industry sectors with no concentration in any single issuer, per the 10-K's own characterization. Funding comes from four revolving credit facilities, three CLO securitizations, and approximately $9.8 billion in aggregate principal of unsecured notes spanning maturities from 2026 through the 2050s. Because most portfolio assets carry floating rates while a portion of the company's own debt bears fixed rates, net investment income is positively exposed to rate increases and compresses in declining rate environments.
Show full overview
Ares Capital is regulated as a BDC under the Investment Company Act, which limits borrowings to levels maintaining at least 150% asset coverage on senior securities. At December 31, 2025, the company reported asset coverage of 189% — a 39-percentage-point buffer above the statutory floor. Falling below 150% would prohibit dividend payments and could trigger loss of regulated investment company tax status. Stockholder authorization for below-NAV share issuances, granted at a special meeting on August 8, 2025, expires August 8, 2026, creating a near-term constraint on equity capital access if common stock trades at a discount to net asset value.
See also: Financial Services · Asset Management
From Ares Capital Corporation's most recent 10-K filing, extracted June 9, 2026.
Recent developments
updated Nov 2, 2026Recent Developments — Ares Capital Corporation
Latest news
- NEWS Ares Capital Corporation Announces Investment in Equinox — fiscal.ai Nov 2, 2026 neutral
- NEWS Ares Capital seals $2.6 billion deal for Apollo's MFIC as consolidation continues - Reuters — Reuters Oct 27, 2026 positive
- NEWS Ares Capital Corporation Stock 12‑Month Price Target Raised to $20.92, Implies 12% Upside - TradingView — TradingView Oct 27, 2026 positive
- NEWS Ares Capital to buy Apollo's MFIC in $2.6 billion deal - Reuters — Reuters Oct 27, 2026 neutral
- NEWS Ares Capital is Making a $2.6 Billion Acquisition. Here’s What it Means for its 10%-Yielding Dividend. - The Motley Fool — The Motley Fool Oct 27, 2026 neutral
Latest item Nov 2, 2026 · Generated 2026-11-05T11:39:29Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHcounterpartyAres Capital Management10-K Item 1A: 'We are dependent upon certain key systems and personnel of Ares for our success and upon their access to other Ares investment professionals.'
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
3 floor-breakers
Ranks in the bottom of its industry peers on the composite signal. Better names in the same sector exist.static
No near-term catalyst priced in. Thesis progression will come from fundamentals grinding, not event reaction.static
Technicals below the gate floor. Component breakdown shows what dragged the score down.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Hold if already holding. Not a fresh buy at $19.46, but acceptable to hold if already in. Reasons: Concentration risk — Counterparty: Ares Capital Management; Analyst target reached - limited upside remaining. Chart setup: Golden cross, above all MAs, RSI 58, MACD bullish. Maintain position. Not compelling to add more. Analyst target $18.27 reached (−6.1%), stop $18.72 (−4.0%), A.R:R -1.0:1. Score 6.0/10, moderate confidence.
Analyst target $18.27 reached (−6.1% from $19.46); no take-profit level is published. Analyst target $18.27 reached (−6.1%), stop $18.72 (−4.0%), A.R:R -1.0:1. Stop-loss: $18.72.
Concentration risk — Counterparty: Ares Capital Management; Analyst target reached - limited upside remaining; Leverage penalty (D/E 1.1): -0.5.
Ares Capital Corporation trades at a P/E of 16.0 (forward 10.0). TrendMatrix value score: 7.6/10. Verdict: Hold.
19 analysts rate ARCC, with a consensus score of 4.2/5. 12 analysts publish price targets averaging $21.
What does Ares Capital Corporation do?Ares Capital Corporation is the largest publicly traded BDC by market cap, with approximately $31.2 billion of total...
Ares Capital Corporation is the largest publicly traded BDC by market cap, with approximately $31.2 billion of total assets at December 31, 2025, invested primarily in first and second lien senior secured loans to U.S. middle-market companies. The company is externally managed by Ares Capital Management LLC, earning fees through base management, income-based incentive, and capital gains incentive fee arrangements, with asset coverage of 189% at year-end.