Ares Capital (ARCC) is trading at a multi-decade low valuation, prompting an upgrade to Strong Buy due to its attractive risk/reward profile. The stock offers a 10.3% dividend yield supported by net investment income, with total annualized returns projected at 18.4% through 2030. Despite concerns about its 70% exposure to software-related sectors, management focuses on stable business infrastructure software, reducing risk. Historically, ARCC rebounds strongly after significant dips, with an 86% success rate and an average one-year return of 36.3%.
Certain high-yield dividend stocks like BDCs, REITs, and midstream partnerships pay ordinary income dividends that are taxed heavily in taxable accounts. Holding these stocks in a Roth IRA allows investors to receive all dividend income tax-free, pro...
Investors holding high-yield BDCs, REITs, and MLPs in taxable accounts face significant tax costs because their dividends are taxed as ordinary income rather than qualified dividends. For example, at a 24% federal tax bracket, $50,000 in dividend inc...
Business Development Companies (BDCs) must distribute at least 90% of taxable income, mostly as ordinary income, which is heavily taxed in taxable accounts. Three BDCs—Ares Capital, Hercules Capital, and Capital Southwest—offer high yields near or ab...
Public business development companies (BDCs) like ARCC and OBDC are currently trading at significant discounts to their book value, reflecting ongoing risk aversion despite stable internal performance. This has created a roughly 20% valuation gap bet...
Certain high-yield investments like midstream MLPs and business development companies (BDCs) pay distributions taxed as ordinary income, which can lose about 24% to federal taxes for investors in the 24% tax bracket. Placing these investments inside ...
