Where Will Ares Capital Corporation Be in 3 Years?

During the past three years, Ares Capital's (NASDAQ: ARCC) stock has risen about 6%. That gain might seem tepid, but it delivered a much bigger total return of 42% after including its reinvested dividends. That's because Ares is a business development company (BDC) that mainly focuses on paying high dividends to income-oriented investors. But will Ares keep generating big gains during the next three years? Let's review its business model, growth rates, and valuations to decide.As a BDC, Ares Capital makes loans to middle-market companies, which generate between $10 million and $250 million in annual earnings before interest, taxes, depreciation, and amortization (EBITDA). It usually invests between $30 million and $500 million in debt and equity in each company.Image source: Getty Images.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool