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ARCC vs CSWC
Which Stock Would AI Choose? Ares Capital Corporation (ARCC) vs. Capital Southwest Corporation (CSWC) Stock Comparison
Key Takeaways
- Both ARCC and CSWC are business development companies (BDCs) delivering high dividend yields exceeding 10%, appealing to income-focused investors.
- CSWC has outperformed ARCC in recent months with approximately 9% gains over the past month, compared to ARCC's 5%.
- ARCC offers greater scale with a $13.4 billion market cap versus CSWC's $1.4 billion, supporting broader diversification.
- Private credit sector pressures have impacted ARCC more noticeably in recent trading sessions, while CSWC benefits from fresh dividend declarations and partnerships.
- Dividend yields stand at 10.3% for ARCC and 10.9% for CSWC, with both maintaining payout consistency amid market volatility.
Introduction
ARCC and CSWC are prominent BDCs that provide debt and equity financing to middle-market companies, generating high yields through interest income and fees. This stock comparison is relevant for income-oriented traders and investors navigating the private credit landscape, where interest rate dynamics and economic conditions influence performance. By examining recent price behavior, financial metrics, and sector sentiment, readers can assess relative strengths in dividend reliability, momentum, and risk profiles. Both stocks offer exposure to resilient lending strategies but differ in scale and growth trajectories, aiding decisions in a yield-hungry market.
ARCC Overview and Recent Performance
Ares Capital Corporation (ARCC) is the largest publicly traded BDC, managing a diversified portfolio of senior secured loans, mezzanine debt, and equity investments primarily in U.S. middle-market firms. With a market cap of approximately $13.4 billion, it emphasizes stable net investment income (NII, a key measure of profitability from investments). In recent weeks, ARCC's stock has traded around $18.67, within a 52-week range of $17.40 to $23.42, reflecting year-to-date gains of about 5%. Sentiment has softened due to broader private credit concerns, including redemption pressures and projected Q1 earnings per share (EPS) declines, leading to underperformance versus major indices. Steady dividends at a 10.3% yield have supported investor interest, though upcoming earnings reports will clarify NII trends.
CSWC Overview and Recent Performance
Capital Southwest Corporation (CSWC) is a smaller BDC focused on first-lien and second-lien debt investments in lower middle-market companies, balancing income generation with growth potential. Its $1.4 billion market cap underscores a nimble approach to deal origination. Recently, shares have hovered near $23.50, in a 52-week range of $19.37 to $24.42, with year-to-date returns around 10% and a 9% monthly uptick. Positive catalysts include consistent monthly dividend announcements, a new joint venture for secured debt opportunities, and insider purchases, bolstering market positioning. The 10.9% dividend yield and resilient NII have driven outperformance relative to peers amid sector headwinds.
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Head-to-Head Comparison
Both ARCC and CSWC operate similar BDC models, originating loans to private companies underserved by banks, but ARCC’s scale enables broader sector exposure and lower volatility, while CSWC targets higher-growth lower middle-market niches. Growth drivers differ: CSWC emphasizes dividend supplements and ventures, contrasting ARCC’s focus on portfolio stability. Recent momentum favors CSWC with stronger returns, versus ARCC’s dips tied to private credit scrutiny. Risk factors include interest rate sensitivity for both, but ARCC’s size mitigates non-performing loan (NPL) impacts better. Market sentiment tilts toward CSWC on insider activity, while ARCC holds analyst favor for long-term positioning.
Tickeron AI Verdict
Tickeron’s AI analysis currently favors CSWC over ARCC, driven by superior recent momentum, a higher dividend yield, and positive catalysts like partnerships amid private credit volatility. ARCC’s stability and scale provide a counterbalance, but CSWC’s relative outperformance suggests better near-term trend consistency. This probabilistic edge reflects observable positioning rather than guarantees.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer. Disclaimers and Limitations
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is ARCC is a StrongBuy and CSWC is a Buy.
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is undervalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
ARCC’s FA Score shows that 3 FA rating(s) are green whileCSWC’s FA Score has 2 green FA rating(s).
- ARCC’s FA Score: 3 green, 2 red.
- CSWC’s FA Score: 2 green, 3 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
ARCC’s TA Score shows that 4 TA indicator(s) are bullish while CSWC’s TA Score has 3 bullish TA indicator(s).
- ARCC’s TA Score: 4 bullish, 4 bearish.
- CSWC’s TA Score: 3 bullish, 3 bearish.
Price Growth
ARCC (@Investment Managers) experienced а -4.19% price change this week, while CSWC (@Investment Managers) price change was +0.35% for the same time period.
The average weekly price growth across all stocks in the @Investment Managers industry was -2.29%. For the same industry, the average monthly price growth was -2.40%, and the average quarterly price growth was -8.27%.
Reported Earning Dates
ARCC is expected to report earnings on Jul 28, 2026.
CSWC is expected to report earnings on Aug 10, 2026.
Industries' Descriptions
@Investment Managers (-2.29% weekly)Investment Managers manage financial assets and other investments of clients. Management includes designing a short- or long-term strategy for buying/holding and selling of portfolio holdings. It can also include tax services and other aspects of financial planning as well. While it is perceived that the industry is faced with growing competition from robo-advisors/digital platforms and passive/ index-tracking funds, many investors still find value in actively managed in-person services that investment management companies often emphasize on. At the same time, many wealth managers are also incorporating digital initiatives/low cost options in addition to their in-person customized services. Their main sources of revenues are fees as a percentage of assets under management, in addition to a certain portion of clients’ gains from asset appreciation. BlackRock, Inc., Blackstone Group Inc and Brookfield Asset Management are some of the major investment management companies.
| ARCC | CSWC | ARCC / CSWC | |
| Capitalization | 12.8B | 1.44B | 888% |
| EBITDA | N/A | N/A | - |
| Gain YTD | -7.092 | 10.722 | -66% |
| P/E Ratio | 10.94 | 12.21 | 90% |
| Revenue | 1.36B | 151M | 901% |
| Total Cash | N/A | N/A | - |
| Total Debt | 15.8B | 1.13B | 1,397% |
ARCC | CSWC | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 71 | 31 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 3 Undervalued | 15 Undervalued | |
PROFIT vs RISK RATING 1..100 | 33 | 32 | |
SMR RATING 1..100 | 21 | 56 | |
PRICE GROWTH RATING 1..100 | 58 | 49 | |
P/E GROWTH RATING 1..100 | 48 | 67 | |
SEASONALITY SCORE 1..100 | 49 | 33 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
ARCC's Valuation (3) in the null industry is in the same range as CSWC (15) in the Investment Managers industry. This means that ARCC’s stock grew similarly to CSWC’s over the last 12 months.
CSWC's Profit vs Risk Rating (32) in the Investment Managers industry is in the same range as ARCC (33) in the null industry. This means that CSWC’s stock grew similarly to ARCC’s over the last 12 months.
ARCC's SMR Rating (21) in the null industry is somewhat better than the same rating for CSWC (56) in the Investment Managers industry. This means that ARCC’s stock grew somewhat faster than CSWC’s over the last 12 months.
CSWC's Price Growth Rating (49) in the Investment Managers industry is in the same range as ARCC (58) in the null industry. This means that CSWC’s stock grew similarly to ARCC’s over the last 12 months.
ARCC's P/E Growth Rating (48) in the null industry is in the same range as CSWC (67) in the Investment Managers industry. This means that ARCC’s stock grew similarly to CSWC’s over the last 12 months.
| ARCC | CSWC | |
|---|---|---|
| RSI ODDS (%) | N/A | N/A |
| Stochastic ODDS (%) | 1 day ago 49% | 1 day ago 46% |
| Momentum ODDS (%) | 1 day ago 30% | 1 day ago 55% |
| MACD ODDS (%) | 1 day ago 30% | 1 day ago 63% |
| TrendWeek ODDS (%) | 1 day ago 37% | 1 day ago 48% |
| TrendMonth ODDS (%) | 1 day ago 44% | 1 day ago 53% |
| Advances ODDS (%) | 11 days ago 39% | 1 day ago 61% |
| Declines ODDS (%) | 1 day ago 40% | N/A |
| BollingerBands ODDS (%) | 1 day ago 66% | N/A |
| Aroon ODDS (%) | 1 day ago 36% | N/A |
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ARCC and
Correlation & Price change
A.I.dvisor indicates that over the last year, ARCC has been closely correlated with OBDC. These tickers have moved in lockstep 80% of the time. This A.I.-generated data suggests there is a high statistical probability that if ARCC jumps, then OBDC could also see price increases.
| Ticker / NAME | Correlation To ARCC | 1D Price Change % | ||
|---|---|---|---|---|
| ARCC | 100% | -1.05% | ||
| OBDC - ARCC | 80% Closely correlated | -0.74% | ||
| GBDC - ARCC | 78% Closely correlated | -0.49% | ||
| BXSL - ARCC | 75% Closely correlated | -1.65% | ||
| CSWC - ARCC | 73% Closely correlated | +0.96% | ||
| TSLX - ARCC | 71% Closely correlated | -2.17% | ||
More | ||||
CSWC and
Correlation & Price change
A.I.dvisor indicates that over the last year, CSWC has been closely correlated with SLRC. These tickers have moved in lockstep 77% of the time. This A.I.-generated data suggests there is a high statistical probability that if CSWC jumps, then SLRC could also see price increases.
| Ticker / NAME | Correlation To CSWC | 1D Price Change % | ||
|---|---|---|---|---|
| CSWC | 100% | +0.96% | ||
| SLRC - CSWC | 77% Closely correlated | -1.25% | ||
| ARCC - CSWC | 71% Closely correlated | -1.05% | ||
| PFLT - CSWC | 69% Closely correlated | -3.07% | ||
| MAIN - CSWC | 68% Closely correlated | -0.63% | ||
| PNNT - CSWC | 67% Closely correlated | -2.62% | ||
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