Are analysts saying “strong buys” for this high-yield dividend stock (8.3%)?

If you’re looking for a wise way to raise wealth while earning passive income, investing in high-yield dividend stocks might be a strategy worth exploring.

These stocks often belong to companies with strong financial and reliable revenue, so they offer regular payments. If a company can consistently pay dividends and maintain a healthy payout rate, it is usually a sign of long-term stability and resilience. This can lead to reliable income and steady capital appreciation for investors.

Among the reliable dividend stocks, ARES Capital (ARCC) stands out for its high yields and solid history of dividend growth. With a dividend yield of around 8.3%, the specialized financial company offers an attractive income stream for those looking to boost cash flows in their portfolio. Additionally, the stock also has a consensus rating of “strong buy” from analysts, showing strong confidence in future performance.

Ares Capital is a business development company specializing in providing loans and private funding directly to middle market companies across the United States.

Ares Capital’s diversifying portfolio, strong underwriting practices and disciplined risk management are well positioned to deliver consistently robust core revenues to cover payments.

For example, Ares Capital’s portfolio is highly diversified, with an average exposure of less than 0.2% per investment with 566 portfolio companies. This broad diversification will help reduce exposure to any company or sector, increasing the resilience of your portfolio in the face of market volatility. The company also focuses on lending to less-periodic service-oriented companies with a solid foundation, which will help maintain stability even in uncertain economic environments. This approach continues to support both revenue and its impressive dividend payment performance.

In the first quarter of 2025, ARES Capital reported a core revenue of $0.50 per share. In particular, credit quality was strong, with non-actual loans and high-risk credits held at historically low levels. The company also maintained strong investment momentum and acquired a total commitment of $3.5 billion over the quarter.

The company’s balance sheet remained solid and conservatively utilized. This will unfold important capital on new opportunities. Its investment portfolio, which was at a fair value of $27.1 billion, has grown conservatively since the last quarter and remains heavily weighted on the US-based services business that has not been exposed to macroeconomic shocks, such as rising tariffs.

All of these support the company’s ability to generate and return consistent cash to shareholders. In the second quarter of 2025, Ares Capital announced a dividend of $0.48 per share, indicating a steady quarter or increase in payments for the 63rd quarter. Additionally, the specialized financial company has increased its dividends for the 15th consecutive year.

Ares’ capital is well located to maintain and grow future dividends. Its core income is consistently above current payout levels, with optimistic optimism about the potential realized profits of the portfolio, which can further boost distributable income.

Ares Capital is a compelling investment for investors looking for both income and growth. With a robust 8.3% dividend yield, a diversified and resilient portfolio and a 15-year track record of dividend growth, ARES Capital emerges as a reliable, high-yield stock.

Furthermore, the analysts’ “strong buy” consensus reflects Ares Capital’s confidence in profitability and long-term outlook. Its robust risk management practices, low leverage profiles and focus on low circular service sectors provides meaningful insulation for market volatility and economic uncertainty. Furthermore, the company’s continued ability to generate core revenues beyond its dividend obligations suggests the potential for future dividend growth.

There are no risk-free investments, but Ares Capital’s strong foundation and shareholder-friendly policy make it an attractive, high-yield dividend stock.

On the date of publication, Amit Singh had no position (directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published barchart.com

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