4-Star Stocks Poised to Pop: Ares Capital

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, business development company Ares Capital (Nasdaq: ARCC  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Ares' business and see what CAPS investors are saying about the stock right now.

Ares facts

Founded 2004
Market Cap $3.5 billion
Industry Specialty finance
Trailing-12-Month Revenue $666.5 million
Management President/Director Michael Arougheti
CFO Penni Roll
Return on Equity (average, past 3 years) 19.6%
Cash/Debt $216.4 million / $2.0 billion
Dividend Yield 9.5%
Competitors American Capital
Apollo Investment
Newtek Business Services

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 431 members who have rated Ares believe the stock will outperform the S&P 500 going forward.

Just last week, one of those Fools, CoreAndExplore, succinctly summed up the bull case for our community: "Fantastic margins, very low debt for a [business development company], a prudently managed portfolio of companies, a fat dividend, and low valuation all point to investment success -- definite BUY at this price."

If you want market-beating returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite its four-star rating, Ares may not be your top choice.

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Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 09, 2012, at 8:19 PM, neamakri wrote:

    The ARCC company description includes the following;

    non-syndicated senior debt,

    Mezzanine debt*

    non-control equity*


    First Lien,

    Second Lien,*


    Senior Stretch,

    Subordinated Debt,*

    Private and Public High Yield

    Sorry, sounds like double talk to me...the four starred items seem the same. I do not trust them.

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10/27/2016 1:02 PM
ARCC $15.48 Down -0.07 -0.45%
Ares Capital CAPS Rating: ****