Ares Capital (NASDAQ: ARCC ) It recently closed the books on 2025 by reporting its fourth quarter and full year financial results. It was a strong year for business development companies (BDCs), capped by record levels of new investment commitments. They added new stable sources of income to support its 10%-yielding dividend.
The BDC It has now paid a steady or increasing dividend for 16 consecutive years. it is In solid state To continue paying bankable dividends, making it binding To buy income stocks.
Where to invest $1,000 now? Our analyst team recently revealed what they believe 10 Best Stocks Join Stock Advisor when you buy now. View Stock »
Ares Capital generated $0.50 per share of core earnings in the fourth quarter, which covered its quarterly dividend of $0.48 per share. This continued the BDC’s trend of providing more core income than its dividend payments. For the year, Ares Capital reported $2.01 per share of core earnings, which covered the $1.92 per share in dividends it paid.
Specialty finance companies also had a strong year in securing new loan investments. Ares Capital made $5.8 billion in new investment commitments in 30 new portfolio companies and 84 existing companies in the fourth quarter, 80% of which were first-lien, senior-secured loans. This more than offset $4.7 billion of investment commitments exited during the period. For the year, BDCs made a record $15.8 billion in total commitments while exiting investments of $12.1 billion.
Ares Capital ended the year with an industry-leading investment portfolio valued at $29.5 billion across 602 portfolio companies. That’s up from $26.7 billion invested in 550 companies by the end of 2024.
The company already grew a strong balance sheet last year. It added a record $4.5 billion in new debt commitments, maintaining sufficient liquidity to support new investment.
Ares Capital is off to a strong start this year securing new investments. It made $1.4 billion in new investment commitments through the end of January, while exiting $709 million in commitments. Meanwhile, the company had an additional $2.2 billion in potential investments in its backlog at the end of January.
These new investments will support the company’s dividend payments. Ares also estimates it will carry forward $1.38 per share of taxable income over last year for distributions in 2026. This provides some additional cushion for its dividend.
