Ares Capital is a business development company (BDC). As a BDC, it makes loans to smaller businesses and uses the interest it earns to pay shareholder dividends.

Ares Capital Corporation is a business development company that lends to middle-market companies. Its 9% dividend yield makes it appealing for income investors.

Boston Partners decreased its holdings in Ares Capital Corporation (NASDAQ: ARCC) by 4.3% during the undefined quarter, according to the company in its most recent disclosure with the SEC. The institutional investor owned 467,296 shares of the investment management company's stock after selling 21,190 shares during the quarter. Boston Partners owned approximately 0.07%

Shares of beverage giant PepsiCo have been dragged lower for reasons that aren't apt to last much longer. Pipeline owner/operator Enterprise Products Partners owns a tollbooth business that's going to generate reliable revenue for more many, many more years.

Ares Capital offers a nearly 10% yield, trades below book value, and maintains strong dividend coverage with spillover income reserves. ARCC's portfolio is anchored in first-lien senior secured loans, supporting stable interest income and reducing the risk of a dividend cut. Despite sector-wide fears of rate cuts and lower net investment income, ARCC's spillover reserve covers about 66% of annual dividends, providing a safety cushion.

There is a major market disconnect in which there are blue-chip dividend payers offering 11%+ yields right now, despite posting strong fundamentals. I discuss why the market is bearish on these stocks and why I think the fears are overblown. I also share two high-yield stocks that I think are attractive buys at current pricing.

Dividend stocks offer a steady income stream to investors, enabling them to generate passive income. Historically, companies that pay and consistently grow their dividends have outperformed those that do not.

Ares Capital (ARCC) and Blue Owl Capital (OBDC) are top BDCs offering double-digit dividend yields and strong portfolio diversification. OBDC stands out with a higher forward yield (~13.3%), superior industry diversification, and a deeper discount to book value than ARCC. Both ARCC and OBDC maintain robust dividend safety, with high percentages of senior secured loans and consistent payout histories.

The stock market is experiencing historically high valuations, as measured by the Shiller price-to-earnings ratio and Buffett indicator. EQT Corporation and Expand Energy are positioned to benefit from the increasing demand for natural gas as a cleaner energy source.

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