RBC Capital Markets analyst, Lee, reiterated a buy rating on Ares Capital Corporation (ARCC) with a price target of $23, calling the stock RBC's favorite BDC name for 2025. Lee cites ARCC's leading position in the BDC space, benefits from scale, strong originations engine, and ~20 years of experience and solid performance.
Major U.S. indices had a good run in 2024, thanks to the buzz around artificial intelligence and interest rate cuts. However, macro uncertainty could weigh on investor sentiment in 2025. In this scenario, investors looking for regular income can consider adding dividend stocks to their portfolios. The analyst highlighted ARCC 's ability to offer flexible capital across various financing solutions for clients as differentiating it from its peers.
Lee also noted other strengths, including the company's impressive history in managing risks through the cycle, access to the resources of the Ares Credit Group, and scale advantages, given that it is the largest publicly traded BDC by assets. Lee also emphasized ARCC's dividends, which are backed by the company's core earnings per share and potential net realized gains.
FINANCE INVESTMENT DIVIDEND STOCKS BUSINESS DEVELOPMENT COMPANIES ARCC
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