Player Avatar tpc2104 (< 20) Submitted: 1/11/2011 1:41:44 PM : Underperform Start Price: $11.36 ARCC Score: +22.67

i own this for the dividend, but i bought it at $8 a share. ARCC can pay its massive dividend because it takes advantage of the current low-rate environment. at $16 and with interest rates having nowhere to go but up (eventually), i can't see much upside potential.

Member Avatar JackCaps (26.29) Submitted: 4/17/2011 1:03:20 PM
Recs: 1

Isn't your pitch based upon the premise that their debt is financed by variable rate debt agreements?

I believe that most corporate issued debt pays a fixed (not variable) rate of return. If that is the case for Ares Capital, wouldn't that be a good thing to lock into historically low fixed rates to finance their investments?

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