Is Ares Capital Stock a Buy, Sell, or Hold Below Its Net Asset Value?
Key PointsAres Capital, the largest publicly traded business development company (BDC), currently trades at around a 4.3% discount to book value.
Ares Capital (ARCC) often trades above its net asset value (NAV), but as of June 30, 2026, the BDC is trading at a 4.3% discount to its NAV, standing at $18.50 per share while the NAV is $19.35 per share. Investors awaiting the company's earnings report next week may consider this a buying opportunity if two key metrics prove satisfactory.
Ares Capital offers a 10.4% forward dividend yield, making it attractive for income-focused investors. However, the company lost nearly 3.25% of its NAV over six months as of June 30, 2026, with analysts expecting the payout ratio to remain around 100%. Although certain metrics seem concerning, such as the increasing nonaccrual rate, if realized losses and the nonaccrual rate remain low, it could be an opportune time to buy Ares Capital stock.
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