I'm not going to lie, I'm pretty addicted to collecting passive dividend income. While I love working, nothing beats getting paid for work someone else did. With a yield of more than 10%, few passive-income investments pay as well as Ares Capital (NASDAQ: ARCC) -- it's almost 10 times higher than the S&P 500's current yield of 1.1%.
That monster yield is why I just bought even more shares of this business development company (BDC).
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
A dividend yield of 10% or more is usually a major red flag. However, that's not the case with Ares Capital. For starters, it's a BDC, which must distribute at least 90% of its taxable net income to shareholders in dividends to remain in compliance with IRS regulations. Given that payout requirement, it's going to have a high yield.
Further, where Ares Capital shines is in its ability to sustain and grow its dividend. It has maintained or raised its payout for 17 consecutive years. That's impressive for a BDC, as most of its peers have had at least one dividend reduction during that time frame. This durability is a testament to the company's strong underwriting, as its ******* ulative investments of more than $73 billion have a net realized loss of less than 0% since inception. That's a far better loss ratio than other BDCs (-1.1%) and even banks (-0.6%). By minimizing losses, Ares Capital has a long history of generating earnings that more than covered its dividend.
#capital #flashing #going
That monster yield is why I just bought even more shares of this business development company (BDC).
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
A dividend yield of 10% or more is usually a major red flag. However, that's not the case with Ares Capital. For starters, it's a BDC, which must distribute at least 90% of its taxable net income to shareholders in dividends to remain in compliance with IRS regulations. Given that payout requirement, it's going to have a high yield.
Further, where Ares Capital shines is in its ability to sustain and grow its dividend. It has maintained or raised its payout for 17 consecutive years. That's impressive for a BDC, as most of its peers have had at least one dividend reduction during that time frame. This durability is a testament to the company's strong underwriting, as its ******* ulative investments of more than $73 billion have a net realized loss of less than 0% since inception. That's a far better loss ratio than other BDCs (-1.1%) and even banks (-0.6%). By minimizing losses, Ares Capital has a long history of generating earnings that more than covered its dividend.
#capital #flashing #going
3 months ago
