Should I Buy Ares Capital Stock in 2025? Expert Analysis for South Africans

What is Ares Capital?

How much is the Ares Capital stock?

The price of Ares Capital stock is stable this week. The current share price stands at $21.99, with a 24-hour change of 0.00% and a weekly drop of 2.18%. Market capitalisation is $15.27 billion, and average daily volume over the past three months is 5.35 million shares. The stock’s P/E Ratio is 10.78, offering a compelling dividend yield of 8.73%, and it features a beta of 0.75, indicating lower volatility than the market. With its reliable dividends and moderate price movement, Ares Capital may appeal to South African investors seeking stable income in a changing market environment.

Our full analysis on the Ares Capital stock

Having rigorously reviewed Ares Capital Corporation’s (ARCC) latest financial statements, dissected its stock performance over the past three years, and run a comparative algorithmic screen across financial metrics, technical signals, and peer group benchmarks, we find the company in a particularly favourable position within the global direct lending and asset management sector. Our combined quantitative and qualitative analysis points to a robust and expanding business model, bolstered by consistent income distributions and strategic capital allocation. So, why might Ares Capital stock once again become a strategic entry point into the alternative finance and yield-oriented investment sector in 2025?

Recent Performance and Market Context

Ares Capital, trading at $21.99 as of 30 May 2025, has shown both resilience and discipline during a period of rising macroeconomic complexity. Over the past twelve months, ARCC has advanced +3.48%, marginally outperforming both the S&P 500 Financials sector and many traditional banks, while significantly outpacing other asset-backed alternatives. Its 52-week trading range ($18.26 – $23.84) demonstrates measured volatility, offering tactical entry opportunities near the lower bound and strong technical resistance near recent highs.

2024 was a year of record investment activity for Ares Capital, with new commitments doubling to $15 billion year-over-year. Even in Q4, where core EPS came in slightly below consensus ($0.55 vs. $0.58 expected), the company delivered several operational milestones—a feat that underpins growing investor confidence despite episodic market rotations. Ongoing sector tailwinds—including an expanding US credit market, consolidation in alternative lending, and rising demand for non-bank credit—further reinforce a constructive outlook. For South African investors seeking exposure to international asset managers with stable income and growth characteristics, ARCC’s performance profile and globalisation of direct lending remain notably appealing.

Technical Analysis

From a technical perspective, ARCC continues to trade just above its 50-day moving average ($21.28), a classically bullish signal suggesting medium-term uptrend resumption. Key support zones at $21.44–$21.45 have repeatedly attracted defensive buying, while overhead resistance at $21.71–$21.72 is the next hurdle to monitor. The 14-day Relative Strength Index (RSI) in the 39–55 range indicates that the stock is neither overbought nor oversold, leaving headroom for further upside moves. With the MACD line at a mildly positive 0.22, momentum remains constructive without signs of exhaustion.

Short- and medium-term momentum structures reveal robust investor accumulation, particularly around technical lows converging with ex-dividend dates—a phenomenon often preceding yield-seeking capital inflows. Combined with an ongoing share buyback programme, the technical backdrop for ARCC appears skewed towards upward price action, providing multiple scenarios for attractive entry positioning.

Fundamental Analysis

Fundamentally, Ares Capital is a powerhouse within the listed Business Development Company (BDC) universe and direct lending. Full-year revenues in 2024 soared to $2.99 billion (+14.38% YoY), with net earnings at $2.44 per share and a record NAV of $19.89—the eighth consecutive quarter of NAV growth. These results reflect the company’s strategic discipline in both origination and risk management, even as net yield moderated to 11.1% (from 12.5%) in line with prevailing interest rate adjustments.

ARCC trades at a compelling Price/Earnings ratio of 10.78, and arguably an even more attractive Price/Book, taking into account the record NAV and eight consecutive quarters of asset growth. Its dividend yield stands at 8.73%—one of the highest in the sector—supported by more than 15 years of stable or rising distributions. Such a payout profile is rarely found among large-cap US financial stocks, particularly those with a $15.27 billion market cap and a conservative 0.99x net leverage ratio.

• Largest listed BDC by market cap, with more than 550 portfolio companies, offering exceptional risk diversification.
• Balance sheet flexibility underpinned by strong credit ratings from multiple agencies, recently upgraded.
• Deep sponsor relationships (over 240 private equity sponsors engaged) and broad geographic reach throughout the US.
• Ongoing innovation through diversified lending structures and capital solutions that capture shifting market demand.

From a valuation perspective, ARCC appears fundamentally undervalued against long-term earnings power, considering its low beta (0.75) and proven ability to manage through market cycles. This context justifies renewed interest—especially as alternative income assets gain attention among global investors seeking yield with measured risk.

Volume and Liquidity

ARCC’s sustained daily trading volume (5.35 million shares, average over three months) is a testament to the stock’s deep marketability and institutional sponsorship. This liquidity profile not only ensures efficient execution for investors at all scales but also acts as a natural stabiliser, reducing price dislocation during volatile market sessions. With a sizable float yet strong insider and sponsor alignment, ARCC’s valuation remains dynamic and responsive, providing an ideal environment for both accumulation and strategic positioning.

Catalysts and Positive Outlook

• Record Investment Activity: $15 billion in new commitments for 2024, more than double 2023 levels, positioning Ares as the leader in direct lending growth.
• Robust Pipeline: $1.8 billion investment backlog as of January 2025, providing strong revenue visibility for upcoming quarters.
• Portfolio Expansion and Upgrades: 550 portfolio companies and credit rating upgrades by top agencies reflect both growth and improving risk profile.
• Sector Tailwinds: The direct lending and alternative credit market continues to expand—fueled by rising demand for flexible capital amid ongoing bank disintermediation.
• ESG Initiatives and Diversification: Significant efforts in broadening sector and geographic diversification, alongside best-in-class governance overseen by external manager Ares Management Corporation.
• Share Buyback Programme: Recently extended $1 billion authorisation through February 2026 provides ongoing support to share price and underpins management’s conviction in intrinsic value.

With the upcoming Q1 2025 results (expected late July/early August), investors can look for further evidence of the business’s momentum, both on top-line growth and sustained dividend coverage.

Investment Strategies

Ares Capital currently offers a spectrum of potential entry strategies, each attractive given the prevailing technical and fundamental backdrop:

• Short-term:
• Entering near the support zone ($21.44–$21.45) or ahead of ex-dividend dates (next: 13 June 2025) maximises yield capture and tactical price upside.
• Technical momentum and positive MACD/RSI dynamics increase the odds of another test of the $22.75 consensus analyst target and potentially the $28.59 fair value projection (+30% from current price).
• Medium-term:
• Buy-and-hold strategies between quarterly earnings and dividend cycles extract both income and compounding growth, with valuation multiples still below long-term averages.
• Participation in the buyback tailwind offers defensive support, while improving fundamentals provide positive surprises against consensus expectations.
• Long-term:
• ARCC’s proven cycle resilience, market leadership, and commitment to increasing dividend distributions over 15+ years make it a cornerstone for yield-oriented portfolios and retirement accounts seeking stable USD income.
• Ongoing sector growth and company-specific pipeline expansion likely ensure that Ares Capital continues to outpace more cyclical or commoditised names in asset management.

For South African portfolios, ARCC offers valuable offshore diversification and consistent US dollar-denominated returns in a world where domestic yields remain relatively low and global financial conditions are in flux.

Is it the Right Time to Buy Ares Capital?

Reviewing ARCC’s robust set of strengths—compelling income, disciplined risk management, ambitious portfolio and earnings growth, and a shareholder-aligned capital return strategy—the bullish case is substantial. The business’s unique position as the leading listed BDC, its sector tailwind in direct lending, and a dividend yield nearing 9% combine to create exceptional appeal for investors seeking stable income and capital growth.

Although all investments carry risk, Ares Capital’s current technical formation and fundamental valuation seem to represent an excellent opportunity for both short-term traders and long-term allocators. The confluence of rising revenue, record portfolio expansion, and structural leadership in a high-growth segment of US financials is an invitation for renewed interest—especially as the next earnings cycle and dividend events approach.

For investors in South Africa and beyond, ARCC appears to be entering a new bullish phase—combining best-in-class income generation, operational upside, and relative defensive positioning in the global asset management universe. The fundamentals justify renewed attention and strategic accumulation at current levels.

Given the operational discipline, dividend strength, and multiple upward catalysts, Ares Capital stands out as a high-conviction addition for those seeking exposure to alternative finance and income, with technical and fundamental metrics aligning at a time when opportunity may be gathering momentum.

How to buy Ares Capital stock in South Africa?

Buying Ares Capital stock online has become straightforward and secure for South African investors, thanks to trusted, regulated brokers. You have two main ways to invest: you can buy Ares Capital shares outright (“spot buying”) or trade price movements using Contracts for Difference (CFDs). Each method has different costs, opportunities, and risks. Below, we explain both strategies so you can decide which suits you best—and don’t forget to explore our detailed broker comparison further down the page for local options.

Spot Buying

When you make a cash (spot) purchase of Ares Capital shares, you directly become a shareholder—entitling you to receive dividends and benefit from any price increase. Most brokers charge a fixed commission per order, typically R100–R200 (around $5–$10 USD).

Example

If the Ares Capital share price is $21.99 and the USD/ZAR exchange rate is 18, a $1,000 (about R18,000) investment lets you buy around 45 shares ($1,000 divided by $21.99 ≈ 45), after including a typical R100 brokerage fee.
✔️ Gain scenario:
If the share price rises by 10%, your shares are now worth $1,100.
Result: +$100 gross gain, i.e. +10% return on your investment.

Trading via CFD

CFD trading allows you to speculate on the price movement of Ares Capital shares without owning them. You don’t receive dividends, but you can use leverage to increase your exposure. Brokers charge a spread (the difference between buy/sell price) and, for positions held overnight, a daily financing fee.

Example

With a $1,000 (about R18,000) deposit and 5x leverage, you control a $5,000 position in Ares Capital CFDs.
✔️ Gain scenario:
If the share price climbs by 8%, your position gains 8% × 5 = 40%.
Result: +$400 profit on an initial $1,000 (excluding fees).

Final Advice

Before investing, always compare fees, currency conversion costs, and trading conditions across different online brokers—these can impact your returns, especially as a South African resident investing offshore. The best method for you depends on your goals: spot buying suits those seeking dividends and long-term growth, while CFDs may appeal to active traders pursuing short-term price moves. See our comprehensive broker comparison below to find the right platform for you.

Our 7 tips for buying Ares Capital stock

The latest news about Ares Capital

Ares Capital maintains a robust dividend yield of 8.73%, with a stable track record and next ex-dividend on June 13, 2025.

This consistently high yield is of notable interest to income-seeking investors in South Africa, as it stands well above both local and international financial benchmarks. Importantly, Ares Capital has delivered stable or rising dividends for over 15 years—an attractive feature for South African portfolios seeking hard-currency, dollar-denominated income streams, particularly in a context where many domestic income options are pressured by macro volatility and inflation. There is no indication of a cut or negative dividend revision for the upcoming quarter, making ARCC relevant for local wealth managers focused on global diversified income.

The company extended its $1 billion share buyback program through February 2026, signaling confidence in its valuation and liquidity.

Share repurchases can enhance total return for existing shareholders and often reflect management’s positive outlook on the stock’s intrinsic value. For South African institutional and private investors pursuing dividend plus capital appreciation strategies, this extension is a constructive signal of stable cash flow and prudent capital allocation, especially given ongoing global market uncertainty. It also suggests potential for price support near current levels, enhancing the appeal for those managing offshore allocations or dual-listed global portfolios.

Ares Capital executed a successful $750 million bond issuance in May 2025 at a 5.5% coupon, maturing in 2030, reaffirming its strong access to capital markets.

This successful deal further secures its funding base and supports future lending activities. A strong balance sheet and attractive refinancing conditions are essential in maintaining operational flexibility—vital for South African investors evaluating credit risk and counterparty strength abroad. The favorable pricing and demand for the offering underscore investor confidence in Ares Capital’s business model, even amid higher-for-longer US interest rates.

Technical analysis shows ARCC trading modestly above its 50-day moving average, with moderate positive momentum and analyst consensus price targets suggesting upside.

The stock’s current price of $21.99 is above its 50-day moving average, signaling continued buying interest. The Relative Strength Index (RSI) in the 39-55 range and a MACD reading of 0.22 signify a neutral to moderately positive technical outlook. Analyst consensus places the target at $22.75—a potential upside from current levels—while the price remains within the upper half of its annual range. For South African market professionals focusing on timing offshore entries, this profile supports disciplined, risk-adjusted accumulation.

ARCC’s business momentum is evidenced by over $15 billion in new commitments for 2024, a record backlog, and continued NAV per share growth.

Ares Capital closed 2024 with $15 billion in new investment commitments—more than double the previous year—while growing its portfolio to 550 companies and hitting a record NAV per share of $19.89 for the eighth straight quarter. These metrics highlight the company’s leadership in direct credit markets and its ability to steadily expand earnings potential, reinforcing long-term relevance for South African investors—especially those looking for dependable exposure to high-growth US mid-market lending, which is structurally underrepresented in domestic financial products.

FAQ

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.