Buffett owns some ARCC, not sure if that is good or bad
By Keith Speights – May 17, 2023 at 5:50AM
Ares Capital (ARCC 0.75%) isn't included among the stocks listed in Berkshire's regulatory filings. However, Buffett nonetheless owns a stake in Ares Capital. How? Berkshire's wholly owned subsidiary New England Asset Management (NEAM) holds a position in the stock.
Key Data Points
$18.60 - $18.86
$16.51 - $20.69
None of the stocks in Berkshire's direct portfolio come close to matching Ares Capital's dividend yield of 10.4%. Ares Capital offers such a high yield because it's a business development company (BDC). Like real estate investment trusts (REITs), BDCs must return at least 90% of their income to shareholders as dividends to avoid paying federal taxes.
But Ares Capital isn't an ordinary BDC. For one thing, it's the largest publicly traded BDC. Ares Capital has also delivered much higher total returns than the S&P BDC Index since its initial public offering in 2004.