Ares Capital Reports Record Investment Activity Amid Solid Earnings

Ares Capital concluded its 2025 fiscal year with a significant acceleration in deployment activity. The business development company met core earnings expectations precisely, though total investment income came in slightly below forecasts. Despite this, the firm's portfolio value registered strong double-digit growth while credit metrics remained robust.

The final quarter of 2025 was marked by exceptional investment activity for Ares Capital. The company committed to a record $5.8 billion in new investments during the period, with $4.1 billion of that capital actually funded. This vigorous pace of deployment propelled the total portfolio fair value to $29.5 billion, representing a 10% increase compared to the prior year's closing balance.

Management emphasized that credit quality has been maintained despite this rapid expansion. Non-accrual loans represented just 1.2% of the portfolio at fair value, a level consistent with the previous year and one that remains below the historical industry average. This stability is attributed to a continued strategic focus on first lien senior secured loans, which now constitute 61% of the total portfolio.

Should investors sell immediately? Or is it worth buying Ares Capital?

Core Earnings Meet Target; Dividend Confirmed

For Q4 2025, Ares Capital generated core earnings per share of $0.50, hitting analyst consensus estimates exactly. This result compares to the $0.55 per share reported for the same quarter a year earlier. Total investment income rose to $793 million, exceeding the prior year's $759 million but narrowly missing the market forecast of $795.2 million.

Concurrent with the earnings release, the board of directors declared a dividend of $0.48 per share for the first quarter of 2026. This distribution maintains the payout level of recent quarters. Shareholders of record on March 13 will receive the payment on March 31. The company's net asset value (NAV) per share stood at $19.94 at year-end, showing a modest increase from the $19.89 NAV per share reported a year prior.

Strong Balance Sheet Positions Firm for 2026

Ares Capital enters the new fiscal year with considerable financial flexibility, holding over $6 billion in available liquidity. The company's net debt-to-equity ratio of 1.08x sits comfortably within its target range. Management's immediate focus will be on integrating the substantial volume of new investments into the existing portfolio. The firm remains on track for its next scheduled dividend payment at the end of March.