Ares Capital Corp. Faces Uncertainty as Q3 Earnings Approach (NASDAQ:ARCC)

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Source: Seeking Alpha
Ares Capital Corp. Faces Uncertainty as Q3 Earnings Approach (NASDAQ:ARCC)
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TL;DR Summary

Ares Capital Corp (ARCC) is no longer the author's favorite Business Development Company (BDC) due to three major reasons. Firstly, ARCC's defensive positioning is not as strong as its peers, with a relatively low allocation to senior secured loans. Secondly, its dividend outlook is not as robust as some of its competitors, as other BDCs have stronger dividend coverage and growth potential. Lastly, ARCC's valuation is not particularly attractive, especially considering its premium to NAV and lack of dividend growth. The author now prefers other BDCs that offer greater exposure to senior secured loans, similar balance sheet strength, and better stock prices relative to NAV.

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