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Strategies & Market Trends : Young and Older Folk Portfolio
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From: chowder12/30/2022 10:01:45 PM
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“BDC Bully” ARCC Dishes 10.5% (This is one of my largest positions and has been paying a special dividend every quarter in 2022 along with the regular dividend)

by Brett Owens, Contrarian Outlook • December 29, 2022

Ares Capital (ARCC) is a business development company (BDC). It was already the biggest BDC on the block. I’ve made the case before that ARCC is also the baddest (in that “bad is good” way) after displaying the audacity to be open in a year when its competitors were essentially closed.

ARCC is a “rich guy favorite” because it pays a lot, and it bullies around its competition. And the great thing about being a bully? Dividend raises.

Not only does ARCC yield a terrific 10.5% but the firm just hiked its payout by 12%. Here we see ARCC’s “dividend magnet” starting to pull its “slow to follow” share price higher:



The knee-jerk reaction from vanilla window shoppers is that ARCC is going to struggle if we slip into a recession. Well, this is obviously not happening as fast as the mainstream media thought it would.

Much to the Fed’s chagrin, the economy is still humming!

As long as the economy chugs along or even muddles through, ARCC is out there lending. Remember it is the lender-of-choice in the BDC space. Price gains are likely from here thanks to its rising dividend.
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