Ares Capital Corporation
- Open
- 18.57
- Day high
- 18.66
- Day low
- 18.50
- Prev close
- 18.51
- Volume
- 7.9M
- Mkt cap
- $13.3B
- P/E (TTM)
- 11.4
- EPS (TTM)
- $1.63
- P/B
- 0.9
- P/S
- 5.1
- Yield
- 10.36%
- Per share
- $1.92
Ares Capital Corporation (ARCC) is a Financial Services company listed on NASDAQ. The stock is down 16% over the past year. Drillr has 3 published research articles covering ARCC.
Ares Capital Corporation (ARCC) financials & analyst ratings
Fundamentals (TTM)
Analyst consensus · 5 analysts
Source: exchange market data + company filings. Figures are trailing-twelve-month or as most recently reported. For informational purposes only — not investment advice.
ARCC earnings date, history & EPS estimates
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Apr 28, 2026 | $0.48 | $0.47 | -2.1% | $763M | -1.9% |
| Feb 4, 2026 | $0.50 | $0.50 | +0.0% | $635M | -18.9% |
| Jul 29, 2025 | $0.51 | $0.50 | -1.2% | $822M | +9.8% |
| Feb 5, 2025 | $0.58 | $0.55 | -5.2% | $393M | -50.0% |
| Oct 30, 2024 | $0.60 | $0.58 | -3.3% | $751M | -2.5% |
| May 1, 2024 | $0.60 | $0.59 | -1.7% | $495M | -29.7% |
| Feb 7, 2024 | $0.60 | $0.63 | +5.0% | $444M | -34.5% |
| Jul 25, 2023 | $0.57 | $0.58 | +1.8% | $497M | -20.1% |
| Feb 7, 2023 | $0.57 | $0.63 | +10.5% | $651M | +11.9% |
| Oct 25, 2022 | $0.50 | $0.50 | +0.0% | $417M | -18.5% |
| Jul 26, 2022 | $0.43 | $0.52 | +20.9% | $479M | +3.2% |
| Feb 9, 2022 | $0.50 | $0.52 | +4.0% | $462M | -2.2% |
ARCC insider trading activity (SEC Form 4)
| Date | Insider | Type | Shares | Price |
|---|---|---|---|---|
| Feb 10, 2026 | MARKOWICZ JANAofficer: Chief Operating Officer | Buy | 15,000 | $19.20 |
| Feb 9, 2026 | Lem Scott Cofficer: CFO and Treasurer | Buy | 5,186 | $19.29 |
| Feb 9, 2026 | HENSON MARY BETHdirector | Buy | 4,000 | $19.14 |
| Feb 9, 2026 | SCHNABEL MICHAEL KORTofficer: Chief Executive Officer | Buy | 12,500 | $19.13 |
| Nov 3, 2025 | SCHNABEL MICHAEL KORTofficer: Chief Executive Officer | Buy | 13,000 | $20.39 |
| Mar 5, 2025 | Miller James Robertofficer: Co-President | Buy | 40,000 | $23.32 |
| Feb 13, 2025 | Bates Ann Torredirector | Buy | 6,000 | $22.75 |
| May 4, 2023 | SCHNABEL MICHAEL KORTofficer: Co-President | Buy | 15,000 | $17.84 |
| Mar 17, 2023 | ROLL PENELOPE Fofficer: Chief Financial Officer | Buy | 3,000 | $17.44 |
| Sep 16, 2022 | ROLL PENELOPE Fofficer: Chief Financial Officer | Buy | 2,500 | $19.04 |
| Sep 2, 2022 | HENSON MARY BETHdirector: | Buy | 9,000 | $19.77 |
| Aug 4, 2022 | ROLL PENELOPE Fofficer: Chief Financial Officer | Buy | 25,000 | $19.77 |
| Jun 17, 2022 | McKeever Steven B.director: | Buy | 2,775 | $17.95 |
| Jun 16, 2022 | Arougheti Michael Jofficer: Executive Vice President | Buy | 300,000 | $17.75 |
| Jun 3, 2022 | HENSON MARY BETHdirector: | Buy | 5,000 | $19.62 |
Source: ARCC SEC Form 4 filings, latest Feb 10, 2026. For informational purposes only — not investment advice.
See the full ARCC insider & 13F page →ARCC research & analysis
ARCC Stock: Why Private Credit Default Risk Just Doubled
UBS Mish projects private credit defaults at 14-15% in AI-disruption tail scenario versus current 4.5%. ARCC has structural absorbers but limited cushion.
OBDCMAINAPOARCC Q1: Core EPS Slips Below Dividend on MTM Noise
Ares Capital's Q1 2026 core EPS of $0.47 fell below its $0.48 dividend, triggering tape concerns about dividend sustainability. However, net investment income remained robust at $0.55 per share, and the core EPS miss is entirely driven by a $0.57-per-share mark-to-market loss on the portfolio, not operational deterioration. Non-accrual loans ticked up modestly to 2.1% of amortized cost, but management characterized the portfolio as healthy. The dividend is not at risk; the tape has conflated mark-to-market volatility with operational stress.
Which Private Credit Lenders Face the Steepest Penalty Risk as SEC Scrutiny Climbs 28%?
The SEC's non-compliance notices to Blackstone and PIMCO signal a regulatory shift in the $1.7T private credit market that the tape hasn't priced into BDC yield spreads. Prospect Capital's $8.9B asset base, 127 portfolio companies, and history of prior SEC actions create 3x the compliance surface area of Main Street Capital's cleaner book. Short PSEC vs long MAIN targets 400bps of yield spread compression over six months as compliance costs surface and potential penalties force a dividend cut.
PSECMAINOXLK
Ares Capital Corporation company profile
Overview
Ares Capital Corporation (NASDAQ:ARCC) is a business development company founded in 2004 that has grown to become one of the largest publicly traded direct lenders in the United States. The company specializes in providing debt and equity financing to middle-market companies, with a focus on businesses generating between $10 million and $250 million in EBITDA. Since going public in October 2004, ARCC has built a diversified portfolio of over 550 companies across various industries and has established itself as a leading player in the direct lending market. The company operates from offices in New York, Chicago, and Los Angeles, enabling comprehensive coverage of middle-market opportunities across the United States.
Business
Ares Capital operates as a business development company (BDC) in the private credit and direct lending industry. A BDC is a special type of investment company that provides capital to small and medium-sized businesses that may have difficulty accessing traditional bank financing or public capital markets. The direct lending industry has experienced significant growth over the past decade as banks have retreated from middle-market lending due to regulatory constraints, creating opportunities for non-bank lenders. The company's core business involves originating, underwriting, and managing debt investments in middle-market companies. These investments typically take the form of first lien loans, unitranche structures (which combine senior and subordinate debt into a single facility), second lien loans, mezzanine debt, and occasionally equity investments. ARCC focuses on companies with established business models and cash flows, typically backing private equity sponsors in leveraged buyouts, recapitalizations, and growth capital transactions. The company operates across multiple market segments within middle-market lending. The lower middle market focuses on smaller companies with EBITDA between $10-50 million, while the core middle market targets companies with $50-150 million EBITDA, and the upper middle market serves larger companies with $150-250 million EBITDA. Based on recent portfolio composition, the majority of investments appear concentrated in the core and upper middle market segments, where ARCC can deploy larger capital amounts and achieve better risk-adjusted returns. The portfolio spans diverse industries including business services, healthcare, information technology, manufacturing, consumer products, and financial services. This diversification helps mitigate sector-specific risks while allowing the company to capitalize on opportunities across different economic cycles.
Revenue model
Ares Capital generates revenue primarily through interest income from its debt investments and dividend income from equity positions. The company's floating-rate loan portfolio benefits from rising interest rate environments, as most loans are tied to benchmark rates like SOFR (Secured Overnight Financing Rate) plus a spread. With a weighted average yield of approximately 11.1% on debt investments as of recent quarters, ARCC earns substantial interest income from its $26.7 billion portfolio. The company's customers are primarily private equity sponsors and middle-market companies seeking financing for acquisitions, refinancings, growth initiatives, or recapitalizations. Private equity firms represent a significant portion of ARCC's deal flow, as they require debt financing to complete leveraged buyouts and often maintain ongoing relationships for follow-on investments in their portfolio companies. ARCC's profitability is influenced by several key factors. Interest rate movements directly impact earnings, with rising rates generally benefiting the company due to its floating-rate loan portfolio, though falling rates can compress yields. Credit quality and defaults significantly affect returns, as loan losses reduce net income and potentially require provisions. The company's current non-accrual rate of 1.7% remains below historical averages, indicating strong credit performance. Competition for deals can compress spreads and reduce available investment opportunities. The direct lending market has attracted significant capital, leading to increased competition and tighter pricing in recent years. However, ARCC's scale, reputation, and relationships provide advantages in winning attractive transactions. Prepayment speeds also affect profitability, as faster repayments require constant reinvestment of capital, potentially at different yield levels. Market volatility and economic conditions influence both deal flow and credit performance, with economic downturns typically increasing default rates while potentially creating opportunities to invest at wider spreads.
Competitive moat
Ares Capital possesses a moderate but meaningful competitive moat built primarily on scale, relationships, and operational expertise. The company's $26.7 billion portfolio size provides significant advantages in the middle-market lending space, allowing it to participate in larger transactions that smaller competitors cannot handle and to offer comprehensive financing solutions including club deals and syndications. The company's relationship-based business model creates switching costs and repeat business opportunities. Over 70% of recent new commitments went to existing portfolio companies, demonstrating the value of maintaining ongoing relationships with borrowers and sponsors. These relationships, built over ARCC's 20-year operating history, provide early access to deal flow and preferential treatment in competitive situations. Operational scale and infrastructure represent another competitive advantage. With 150 dedicated direct lending professionals and established underwriting processes, ARCC can efficiently evaluate and manage a large volume of transactions. The company's ability to review over $500 billion in potential transactions annually while maintaining selectivity (mid-single-digit acceptance rate) demonstrates both market access and disciplined investment processes. However, the moat faces several challenges. The commoditization of capital in direct lending has intensified competition and compressed spreads. New entrants, including other BDCs, private credit funds, and even banks returning to middle-market lending, continuously pressure pricing and terms. The relatively standardized nature of debt products limits differentiation opportunities compared to more specialized financial services. Regulatory risks specific to BDCs, including leverage restrictions and distribution requirements, could potentially impact competitive positioning. Additionally, the company's dependence on external capital markets for funding creates vulnerability during periods of market stress or when accessing debt or equity capital becomes expensive or unavailable.
Risks & safety
ARCC demonstrates a moderate margin of safety with strong liquidity but elevated leverage typical of the BDC structure. **Liquidity and Solvency:** 1. Strong cash position of $635 million plus $6.7 billion total available liquidity 2. Debt-to-equity ratio of 0.99x, near the lower end of BDC leverage ranges 3. No immediate solvency concerns given diversified funding sources and strong cash generation 4. Investment-grade ratings from both S&P (BBB) and Moody's (Baa2) with recent upgrades **Valuation Metrics:** 1. Price-to-book ratio of 1.07x, reasonable for a quality BDC 2. Price-to-earnings ratio of 10.0x based on recent earnings 3. Dividend yield of approximately 9.5% appears sustainable given spillover income of $883 million 4. Trading at modest premium to book value reflects market confidence in management and portfolio quality **Other Considerations:** 1. Low non-accrual rate of 1.7% indicates strong current credit quality 2. Diversified portfolio across 550+ companies limits single-name concentration risk 3. Floating-rate portfolio provides some protection against interest rate volatility 4. Experienced management team with long track record through multiple credit cycles
Recent development
Over the past few years, Ares Capital has undergone significant strategic evolution and leadership changes while substantially growing its investment platform. The most notable development is the leadership transition, with Kort Schnabel becoming CEO in April 2025, replacing Kipp DeVeer who stepped down but remains on the board and investment committee. This transition represents a planned succession within the experienced management team. The company has achieved remarkable portfolio growth, expanding from $21.8 billion in 2022 to $26.7 billion by the end of 2024, representing over 20% growth. This expansion was driven by record origination activity, including $15 billion in new commitments in 2024 alone—more than double the 2023 volume. The increased activity reflects both market share gains and improved market conditions for direct lending. Strategic acquisitions have enhanced ARCC's capabilities, including the acquisition of Riverside Credit Solutions to strengthen its lower middle-market lending platform. This acquisition added specialized expertise and deal flow in the smaller company segment, complementing ARCC's existing focus on core and upper middle-market opportunities. The company has significantly strengthened its balance sheet through credit rating upgrades from both S&P and Moody's, reflecting improved credit metrics and operational performance. These upgrades have reduced funding costs and enhanced access to capital markets. ARCC has also diversified its funding sources and extended debt maturities to provide greater financial flexibility. Market positioning improvements are evident in ARCC's increased market share within direct lending. The company now participates in approximately 90% of new leveraged buyouts completed by direct lenders, up from historical levels. This enhanced market position reflects both the growth of the direct lending market relative to traditional bank lending and ARCC's competitive advantages in winning transactions.
ARCC company profile · for informational purposes only — not investment advice.
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