Some market analysts issued a "Sell" rating for Ares Capital Corporation (ARCC). They cite increasing credit risks within its portfolio and concerns over dividend sustainability.
Core earnings per share fell below its dividend payout for the second consecutive quarter. This raises questions about the company's ability to maintain the current distribution level.
The broader private credit market sees a rise in defaults. Ares Capital experienced an increase in non-accrual loans and unrealized losses.
Other analysts, however, highlight the company's strong performance in a rising interest rate environment. A large portion of its new investments feature floating rates.
Ares Capital will release its third-quarter earnings on October 27, 2026. The report will offer further insight into its financial health.