I couldn't help but pick up another 37 pieces. 🚀 Hayt you $ARCC (-1.07%) in the depot too?

Today again with$ARCC (-1.07%) topped up today. Now it's enough for the start, and from next month I'll turn my attention to the next position in order to diversify even more. I have especially $CL (-0.4%) or $SCI (+1.26%) in mind. What have you bought in the last few days?

Because why not

Dear Conspiracy... ui, wrong chat... dear Getquiner, today I have built up my first $ARCC (-1.07%) position today. Which of you also has it in your portfolio?

The start of summer in June combined sport and leisure for me. By that I mean swimming, hiking, running and sport at home. Apart from the incoming dividends, I hardly noticed anything on the stock market. It was not the strongest distribution month due to the postponement of three distributions, but it was still a very strong one. Time for a review.

Overall performance

The portfolio tended to tread water in June, but that is no cause for concern. Bit by bit, it is fighting its way out of the lows of the customs conflict. And cash flow continues to be generated by distributions to the clearing accounts. The key performance indicators are:

• TTWROR (month of May): +0.19 %
• TTWROR (since inception): +65,45 %
• IZF (month of May): +2.47 %
• IZF (since inception): +10,21 %
• Delta: +€148.63
• Absolute change: +1,173.63 €

Share allocation & performance

Which shares performed particularly well in June? Which are at the top and which at the bottom of the rankings? Which were the biggest losers?

Size of individual share positions by volume

• Share: Share of total portfolio in % (securities account)
• $AVGO (-0.71%) 2.78 % (main share portfolio)
• $NFLX (-0.08%) 2.20 % (main share portfolio)
• $WMT (-0.15%) 1.71 % (main share portfolio)
• $SAP (+0.34%) 1.59 % (main share portfolio)
• $FAST (+0.83%) 1.55 % (main share portfolio)

Smallest individual share positions by volume:

• Share: Share of total portfolio in % (securities account)
• $SHEL (+0.53%) 0.44 % (crypto follow-on portfolio)
• $HSBA (+1.27%) 0.54 % (crypto follow-on portfolio)
• $TGT (+0.55%) 0.62 % (main share portfolio)
• $GIS (+0.87%) 0.63 % (main share portfolio)
• $CPB (-0.43%) 0.64 % (main share portfolio)

Top-performing individual shares

• Share: Performance since first purchase % (securities account)
• $AVGO (-0.71%) : +261 % (main share portfolio)
• $NFLX (-0.08%) : +198 % (main share portfolio)
• $SAP (+0.34%) +106 % (main share portfolio)
• $WMT (-0.15%) : +68 % (main share portfolio)
• $RSG (+0.1%) +47 % (main share portfolio)

Flop performer individual shares

• Share: Performance since first purchase % (securities account)
• $DHR (+1.37%) -57 % (main share portfolio)
• $CPB (-0.43%) -42 % (main share portfolio)
• $TGT (+0.55%) -37 % (main share portfolio)
• $GIS (+0.87%) -36 % (main share portfolio)
• $NKE (-0.32%) -30 % (main share portfolio)

ETFs vs. shares

The breakdown of ETFs vs. shares across all portfolios is 38.7% to 61.3%. This differs from the breakdown of my ETFs to equities savings plans (43% to 57%). Equities have performed better, which is due to the fact that I also include high-dividend ETFs in the ETFs.

Investments and additional purchases

Here is a brief overview of what I have invested in savings plans according to my fixed planning.

• Planned savings plan amount from the fixed net salary: €1,030
• Planned savings plan amount from the fixed net salary, with reinvested dividends: €1,140
• Savings ratio of the savings plans to the fixed net salary: 49.75

In addition, there were the following additional investments from returns, refunds, cashback, etc. as one-off savings plans/repurchases:

• Subsequent purchases/one-off savings plans as cashback annuity from refunds: € 32.32
• Automatically reinvested dividend by broker: € 7.25 (Function is only activated for an old custody account, as I want to control the reinvestment myself)

Additional purchases were made from other surpluses:

• Number of additional purchases: 2
• 25.00 € for $FGEQ (+0.3%)

There were no additional purchases from the components of my cashback pension (e.g. reimbursements from health insurance premiums, insurance premiums, shopping vouchers, etc.) this month.

If you would like to know how my cashback pension supplements my equity and ETF pension, please let me know.

Passive income from dividends

My income from dividends amounted to € 152.30 (€ 179.04 in the same month last year). This corresponds to an increase of -14.94 % compared to the same month last year. The following is further key data on the distributions:

• Number of dividend payments: 31
• Number of payment days: 15 days
• Average dividend per payment: € 4.91
• average dividend per payday: € 10.15

The top payers are:

• $VNA (+0.31%)
• 
  $ARCC (-1.07%)
• 
  $TDIV (+0.76%)

My passive income from dividends (and some interest) mathematically covered 15.91% of my expenses in the month under review.

Crypto performance

My crypto investments also moved a little:

• Monthly performance portfolio: +3.81 %
• Performance since inception: +79.49 %
• Proportion of holdings for which the tax holding period has expired: 100%. This means that there have been no additional purchases for over a year.
• Crypto share of the total portfolio: 2.19 %

I find the topic exciting, but it is very underrepresented in my overall portfolio due to my passive income strategy. The first profits have already been realized and more will definitely follow. For me, crypto is a lever to turn play money into even more play money, which is then put into the solid distributors to make the income snowball grow bigger and bigger. New accumulation will take place in the coming bear market.

Performance comparison: portfolio vs. benchmarks

A comparison of my portfolio with two important ETFs shows:

• TTWROR (current month): +0.19 %
• $VWRL (+0.3%) : +0.39 %
• $VUSA (+0.19%) : +1.24 %

Outlook and conclusion

I'm using the summer, which has already begun, not only for hiking, but also for city trips for my "non-financial" TikTok and Insta channel. I can often be found at one of the lakes near Leipzig, which were once created from the open-cast mining pits of the brown coal era. It's nice that the lunar landscapes have become a local recreation area. That's why I'm less active at the moment. That will certainly change again in the fall.

For now, I'm just enjoying life, and my money continues to work stubbornly and steadily for me in the background. Current events in the world and in politics don't interest me in the slightest. As I write this review, the first third of the summer will soon be over.

👉 You want my review as an Instagram post?

Then follow me on Instagram:

📲 You'll find regular posts there as well as the portfolio and budget review: @frugalfreisein

How did your June at the depot go? Do you have any tops & flops to share? Leave your thoughts in the comments!

$ARCC (-1.07%)

Sometimes the most exciting investment ideas don't come from YouTube videos or analyst reports, but from friends. In this case, it was Tim - he had Ares Capital on his radar and said: "Hey Stefan, take a look at this - pretty high dividend, kind of a financial company, but not a classic REIT." Sounds vague, so I took a closer look.

You can see what came out of it here: an in-depth analysis in the usual SteFinanz style - with everything that goes with it: business model, figures, opportunities, risks, valuation, interest rate environment, taxes, DCF, and of course: what do I do with it?

What is Ares Capital?

Ares Capital Corporation (ticker: ARCC) is not a bank, but also not a fund. It is a so-called Business Development Company (BDC) - in simple terms: a listed SME financier with a high dividend.

The business model: ARCC grants loans to medium-sized US companies, often in niches or growth sectors where traditional banks tend to stay away. The loans are mostly senior collateralized (first lien), often with variable interest rates and currently yield an average of 11-12% interest.

ARCC is managed by the well-known investment company Ares Management a big player in the private credit sector. Advantage: Deal flow, experience, structures. Disadvantage: Management fees.

What makes ARCC special: It is the largest listed BDC in the USA, with a portfolio of over 450 companies, well diversified and has remained robust through various crises. The company currently pays a dividend yield of just under 10 %with a relatively moderate level of debt and a historically low default rate.

Sounds good, doesn't it? But: the valuation is sporty, the interest rate environment is changing and the credit cycle is no walk in the park. Let's take a look inside.

Fundamental key figures (as at July 2025)

Key figureValue

Share price

19.44 € (approx. 22.5 $)

Dividend yield

approx. 9.5-10 % gross

Price-earnings ratio

~9-10

Price-to-book ratio

~1,1

Return on equity

~11-12 %

Debt (D/E)

~1.0x (conservative)

Default rate

~1.0 % (fair value)

NAV per share

~20 $ (~18 €)

The share price is slightly above book value, the dividend is generous but covered by current income. The default rate is extremely low for a loan portfolio of this size. ARCC leverages moderately and works with quality - no wild gambling.

How does ARCC earn its money?

Roughly speaking: ARCC raises capital, lends it on at high interest rates, collects interest, pays taxes (hardly any, because it has a REIT-like structure), pays out a lot - and that's it.

The focus here is on variable-interest loanswhich has been extremely profitable in recent years: interest rates in the USA have risen, as has interest income. At the same time, the risk has increased - the question is: how long can borrowers hold out?

Things are looking good so far. ARCC has managed the portfolio conservatively. Over 80 % of the loans are first lien. The average loan amount is less than 0.5 % of the total portfolio - in other words: broadly diversified, low cluster risks.

Valuation: Is the share too expensive?

In short: Fairly valuedperhaps slightly ambitious.

A conservative DCF model (based on expected dividends, 1 % growth, 10 % discount rate) arrives at a fair value of around fair value of around € 18-19 - exactly what the share currently costs.

Relatively speaking, ARCC is rather expensive in the BDC sector: While other BDCs trade at a discount to book value, ARCC is trading at 1.1x NAV. But: Quality costs.

As long as the dividend is secure and the NAV remains stable, the premium is justifiable. If interest rates fall sharply or defaults rise - then things get tight. But this applies to all BDCs.

Opportunities

• Stable dividend: Constant for years, not even cut in COVID. Almost a high-yield blue chip.
• Variable-interest loans: Continue to benefit from high US interest rates.
• Big name: ARCC is the top dog among BDCs - economies of scale, deal flow, management access.
• Good history: Averaged over 13% total annual return over the last 10 years.
• Low default rate: Portfolio is solid, hardly any major loan defaults to date.
• Insider buying: Management has been buying shares recently - not a bad sign.

Risks

• Interest rate turnaround: If the Fed cuts interest rates in 2026 or earlier, interest income will collapse - earnings will shrink.
• Economy: If the USA slides into recession, default rates will rise. Then the dividend may also have to fall.
• Management fees: ARCC is managed externally - Ares cashes in. Not necessarily bad, but in case of doubt it costs returns.
• Premium valuation: The share is not cheap. If confidence wanes, there is a risk of a return to book value or below.
• US taxes: 15% withholding tax on dividends - creditable, but net remains slightly less.

What do the analysts say?

In a nutshell: Everyone thinks it's okay.

Nobody is shouting "Buy!", but nobody is shouting "Sell!" either. The price targets are 22-23 $, which is pretty much at the current price. The dividend is the main argument for many.

ARCC is a typical "buy-and-hold income stock" - you don't buy it because of the price gains, but because of the dividend. If you know that, it's a good investment.

What do I do now?

I thought about it for a long time. The dividend is great. The history is strong. The valuation is not exaggerated.

But: We are late in the credit cycle. The risks are increasing. And with a 10% dividend, you can't afford to make many mistakes. I would not jump in blindly right awaybut: Put it on the watch list and wait for a setback.

If the share falls below €18 again, you could start buying. If you really want to get in, perhaps in small tranches. Or via a savings plan.

Me personally?

👉 Not yet a buy - but definitely worth watching. If interest rates stay high for longer and defaults remain under control, ARCC is a solid dividend earner.

SteFinanz traffic light on Ares Capital

CategoryValuationComment

Balance sheet quality

🟢 Good

Moderate debt, stable NAV development

Business model

🟢 Robust

Solid, proven BDC model, but dependent on interest rates

Dividend stability

🟢 Up to 🟡

High payout, but dependent on interest rates and the economy

Valuation

🟡 Fair

Slightly expensive vs. peers, but quality costs

Growth potential

🟡 Limited

Price fantasy limited - dividend is main argument

Risk

🟡 Medium

Credit risks, interest rate cycle, economy

Tax expense (DE)

🔵 Neutral

US withholding tax creditable, but slightly less net

Long-term potential

🟢 Stable

Good risk/reward ratio over 5+ years

Conclusion:

Ares Capital is not a high-flyer, but a solid dividend donkey. If you are looking for high current income and can withstand cyclical fluctuations, you can do little wrong here - as long as you don't ignore the risks.

Landed on Tim's radar, remained on my watchlist.

If you liked the analysis - please share it with others who are looking for dividend stocks. And if you have any questions or your own experience with BDCs: write to me!

Disclaimer: Not investment advice. Just sharing my personal opinion.

https://stefinanz.de/2025/07/10/ares-capital-das-dividenden-monster/