Where Will Ares Capital Corporation Be in 1 Year?

Ares Capital (NASDAQ: ARCC) is often considered a reliable income investment. It's the world's largest business development company (BDC), with a $26.8 billion portfolio at the end of 2024, and it pays out most of its profits as dividends. It currently pays a hefty forward dividend yield of 9.1%, and it has paid continuous dividends since its IPO in 2004. BDCs also need to pay out at least 90% of their taxable profits as dividends to maintain a lower tax rate.

But over the past 12 months, Ares' stock has stayed nearly flat as the S&P 500 rose 5%. Should investors expect it to hold steady and keep generating big dividends over the next 12 months?

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