ARCC (Ares Capital)

[Kerim]

Anybody own or know anything about this one? A friend got turned on to it somehow, and asked my opinion. Small company, yielding 9.8 percent. I'd never heard of it and at first glance it looks like some kind of business services and financing company? Or something?

[cemanuel]

It's a BDC. I owned it until about a year ago and made good money on it but decided to get out of RICs. Seems to have similar performance to MAIN without the chronic overvaluation. I haven't followed it since I sold.

[fenders53]

I have owned it a lot the past five years. I do trim the runs when it gets way over NAV due to it's popularity. I think it is very high quality and diversified, but it gets hit with the stock market, rising rates or a scared bond market. Just makes it a tough buy and hold. My returns are outstanding but not if I just held it. MAIN is another excellent BDC. Trades just like ARCC. Buy it below NAV.

[ken-do-nim]

When I retire, I plan to switch the ROTH IRA investments over to income generation, as follows:

Jan/April/July/October dividend - FSK

March/May/August/November dividend - HTGC (for some reason this one delays the Feb payment to March)

March/June/September/December dividend - ARCC

[ChadR]

Will 100% of your ROTH IRA be invested in these 3 stocks?

Are you worried about dividend cuts and or no dividend raises from these 3 stocks?

Not trying to be a wet blanket, but I would be worried if I had all of my assets in these 3 stocks. I haven't researched these stocks so they might have raises in line with inflation and never had dividend cuts so these questions could be moot.

[ken-do-nim]

My hope is that the ROTH IRA gets to around $300k by retirement. Then, with a yield averaging out to 10%, it gives me a nice $30k base that is tax-free.

There are other high yielders I could add; OMF and BXSL in particular I am interested in as well. I try to avoid high yielders that lose value over time, although FSK is down 10% in the past 5 years, but that's not bad.

Most of these don't raise dividends year after year in a linear fashion like traditional DGI, but for instance if you look at ARCC, it was paying $.38 in 2017 and now it is up to $.48. Still, dividend raises here aren't essential, as the yields are already very high. I'm more interested in capital preservation. Standard DGI with nice qualified dividends will come from the non-retirement brokerage account.

[ken-do-nim]

Article on it today: https://finance.yahoo.com/news/ares-capi...00935.html

[ken-do-nim]

(12-02-2023, 07:43 AM)ken-do-nim Wrote: When I retire, I plan to switch the ROTH IRA investments over to income generation, as follows:

Jan/April/July/October dividend - FSK

March/May/August/November dividend - HTGC  (for some reason this one delays the Feb payment to March)

March/June/September/December dividend - ARCC

Update: I am swapping out FSK for BXSL.  I am concerned that the former won't be able to keep its price up.  In general, I try not to own anything that is negative in the last 5 years.  FSK is now -26% in the last 5 years.  Fenders once noted that the highest it seems a stock can go in yield and keep its price is about 8%, at most 10%.  FS KKR is over 12%.  Blackstone on the other hand is at the bleeding edge of 10.29% yield, and eeks out a +3.24% in the last 5 years.  It is also giving regular dividend raises.

As for OMF, that can go in the taxable account, as it will be able to supply qualified dividends.  I think it's a DGI dream stock.

[ken-do-nim]

Interesting article I read today: https://247wallst.com/investing/2024/09/...in_content. It includes ARCC and HRZN, which I am very familiar with, but the first entry, ABR is a new revelation. It's a solid DGI high-yielder! The dividend started at 0.075/share in 2012 and is now up to 0.43/share (11.72%) 12 years later. The share price is also up 11% over the last 5 years. The article also covers NextEra Energy Partners, but it's down 52% in the last 5 years, and Trinity Capital, which has an inconsistent dividend (though high).