#5 - Ares Capital (NASDAQ:ARCC)
Having access to capital has been a key for small- and medium-sized businesses to survive the global pandemic. Ares Capital (NASDAQ:ARCC) helps fill that need. The firm is a direct lender to private, mid-market companies who need financing.
For those who are unfamiliar with the company, Ares Capital is a business development company (BDC). BDCs are a corporate structure that was established in the 1980s as a way for public investors to invest in privately held U.S. businesses.
Since the company’s initial public offering (IPO) in 2004, Ares Capital has averaged an 11% return for its shareholders every year. As of September 30,2020, the company had a fair value of over $14 billion ($14.4 billion) and had a diversified portfolio of 347 companies.
And another thing, BDCs operate similar to real estate investment trusts (REITs) in that they are required to distribute at least 90% of its taxable income as dividends.
About Ares Capital
Ares Capital Corporation is a business development company specializing in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle market companies. It also makes growth capital and general refinancing. It prefers to make investments in companies engaged in the basic and growth manufacturing, business services, consumer products, health care products and services, and information technology service sectors.
Read More - Current Price
- $21.05
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 6 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $21.71 (3.2% Upside)
