Ares Capital Q3 2026: Dividend Now Exceeds Core Earnings
As seen on the 24/7 Wall St. homepage on October 27, 2026.
Core earnings now sit below the $0.48 quarterly dividend the board just declared again, after a third straight quarter of declining EPS missed expectations. Management is leaning on a $2.5 billion backlog and the pending MidCap Financial deal to close the gap.
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Ares Capital's $0.46 core earnings per share missed consensus and now sits below the $0.48 quarterly dividend the board declared for Q4. It is the third consecutive quarter of declining EPS.
Total investment income of $763 million came in short of the analyst estimate, keeping the top line from refilling the dividend cushion. A swing to net realized losses from prior-year gains pulled GAAP net income lower as well.
A slower deal environment is the central culprit, with new investment commitments falling to $2.1 billion and compressing the fee income that had previously padded earnings above the dividend threshold. NAV per share slipped and non-accrual loans edged higher.
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Management is leaning on two pillars to restore the earnings cushion: a $2.5 billion investment backlog entering Q4 and post-quarter commitments that show origination activity picking back up. The pending acquisition of MidCap Financial Investment Corporation, announced October 26, is the larger bet, with CEO Kort Schnabel saying the deal along with higher portfolio yields is expected to reinforce underlying earnings power and support the current dividend level.
Weighted average yields on debt and other income-producing securities ticked up to 10.6%, a modest offset to the fee-income shortfall. New unsecured notes carrying a far higher coupon than the maturing debt they replace mean interest expense is rising while origination income is under pressure. How quickly the MidCap deal closes will decide whether the dividend stays covered.
Mentioned: ARCC