Ares Capital upgraded to Strong Buy with 10.3% dividend yield and 18.4% returns forecast through 2030.

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%.