Advertisement
ARCC vs PSEC
Which Stock Would AI Choose? Ares Capital (ARCC) vs. Prospect Capital (PSEC) Stock Comparison
Key Takeaways
- ARCC is the largest business development company (BDC) by market value, while PSEC is a much smaller, higher-yielding peer trading at a deep discount to its net asset value (NAV).
- ARCC offers a roughly 10% dividend yield and recently announced a $2.6 billion acquisition of MidCap Financial, while PSEC carries a much higher, but less certain, yield near 28%.
- ARCC trades close to its NAV, whereas PSEC trades at a steep discount reflecting persistent NAV erosion and market skepticism about dividend sustainability.
- Analyst consensus leans "Buy" for ARCC and "Sell" for PSEC, a wide gap in sentiment that shapes this stock comparison.
- For additional detail, explore ARCC Major News and ARCC Today's Price Move, as well as PSEC Major News and PSEC Today's Price Move.
- For data-driven market positioning, explore Trending AI Robots.
Introduction
Ares Capital Corporation (ARCC) and Prospect Capital Corporation (PSEC) are both business development companies (BDCs), a category of publicly traded lenders that provide financing to middle-market companies and pass most of their income to shareholders as dividends. The two names sit at opposite ends of the BDC spectrum, making them a useful contrast for income-focused investors evaluating relative performance and risk. ARCC represents scale, diversification, and stability, while PSEC offers an outsized headline yield alongside a smaller balance sheet and a discounted valuation. This comparison examines recent market activity, fundamentals, and sentiment to clarify how each stock is positioned in the current environment.
ARCC Overview and Recent Performance
Ares Capital Corporation is the largest BDC in the United States, with a market capitalization above $13 billion. Its portfolio is dominated by first-lien senior secured loans across a broad range of industries, including software, healthcare, and business services, which supports a diversified income stream. In recent weeks, ARCC has traded in the high teens, near the lower end of its 52-week range, and its forward dividend yield sits around 10%. The company recently reported a modest earnings miss, with core earnings per share below consensus and total investment income down slightly year over year, reflecting a seasonally slower origination period. Offsetting that, ARCC announced a $2.6 billion acquisition of MidCap Financial, a deal management expects to add to core earnings, and it continues to pay a stable dividend supported by a sizable spillover of excess taxable income. Shares trade at roughly a small discount to NAV, a relatively rare position for a BDC of this quality.
PSEC Overview and Recent Performance
Prospect Capital Corporation is a closed-end BDC that lends to and invests in middle-market private companies across numerous sectors, primarily through senior secured loans and equity co-investments. With a market capitalization near $830 million, it is substantially smaller than ARCC. PSEC shares have traded near the lower end of their 52-week range in recent market activity, and the stock carries a very high dividend yield of roughly 28%, a level that reflects both its monthly payout schedule and a sharp decline in share price. The company's NAV per share has declined over the past year, and shares trade at a deep discount to book value, signaling investor concern about credit quality and payout sustainability. Recent developments include an exit of its investment in RGIS Services and stable net investment income (NII), though analyst ratings lean toward "Sell" with a target near $2.00 per share.
Trending AI Robots
Tickeron's Trending AI Robots page curates a selection of algorithmic trading strategies from a library of hundreds of AI trading bots that collectively monitor thousands of different tickers. Because market conditions shift, only the bots best suited to the present environment earn a place in this featured list. Each bot runs a distinct trading style, strategy, timeframe, performance history, and target universe of tickers, giving traders and investors a range of approaches from which to choose. Whether you prefer short-term momentum strategies or longer-horizon positioning, the page provides a convenient starting point for evaluating automated, data-driven tools. Explore Trending AI Robots to review the currently featured bots and their performance statistics.
Head-to-Head Comparison
The clearest contrast between these two BDCs is scale and portfolio composition. ARCC runs a large, highly diversified senior-secured lending book, while PSEC operates a smaller portfolio with greater concentration and a heavier reliance on equity-linked investments. Dividend profiles differ sharply: ARCC offers a lower but more dependable yield backed by spillover income and modest leverage, whereas PSEC offers a much higher yield that the market appears to be discounting as less secure. Valuation tells a similar story, with ARCC trading near NAV and PSEC trading at a fraction of book value. Risk factors also diverge: ARCC faces near-term earnings and credit-spread pressures, while PSEC contends with NAV erosion and the ongoing question of whether its distribution is fully covered. In terms of momentum and market sentiment, ARCC holds a clearer growth catalyst in its MidCap acquisition, while PSEC remains largely defensive.
Tickeron AI Verdict
Based on observable factors such as trend consistency, balance-sheet stability, dividend coverage, and catalysts, Tickeron's AI would likely favor ARCC over PSEC in the current environment. ARCC exhibits more stable relative performance, trades near NAV rather than at a distressed discount, maintains a well-covered dividend with a positive earnings catalyst on the horizon, and carries a stronger analyst consensus. By contrast, PSEC shows persistent NAV decline, an unusually high yield that signals elevated payout risk, and weaker sentiment. That said, the comparison is not a definitive prediction; a probabilistic model would weigh ARCC's stability and catalysts favorably, while treating PSEC's discounted valuation as a higher-risk, higher-yield alternative best suited to investors comfortable with greater uncertainty.
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.
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 Buy and PSEC is a Hold.
ARCC's RSI Oscillator ascends from oversold territory
The RSI Indicator for ARCC moved out of oversold territory on October 08, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 20 similar instances when the indicator left oversold territory. In 11 of the 20 cases the stock moved higher. This puts the odds of a move higher at 55%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 29, 2026. You may want to consider a long position or call options on ARCC as a result. In 44 of 89 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 49%.
The Moving Average Convergence Divergence (MACD) for ARCC just turned positive on October 22, 2026. Looking at past instances where ARCC's MACD turned positive, the stock continued to rise in 19 of 46 cases over the following month. The odds of a continued upward trend are 41%.
ARCC moved above its 50-day moving average on November 04, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +3.30% 3-day Advance, the price is estimated to grow further. Considering data from situations where ARCC advanced for three days, in 133 of 344 cases, the price rose further within the following month. The odds of a continued upward trend are 39%.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 3 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The 10-day moving average for ARCC crossed bearishly below the 50-day moving average on October 02, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 4 of 14 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 29%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ARCC declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 40%.
ARCC broke above its upper Bollinger Band on November 02, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for ARCC entered a downward trend on October 16, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 11 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 12 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 26 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 80, placing this stock better than average.
The Tickeron Price Growth Rating for this company is 50 (best 1 - 100 worst), indicating steady price growth. ARCC’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of 86 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.000) is normal, around the industry mean (2.440). P/E Ratio (14.440) is within average values for comparable stocks, (-3.350). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (1.319). Dividend Yield (0.099) settles around the average of (0.267) among similar stocks. P/S Ratio (11.792) is also within normal values, averaging (15.694).
PSEC's RSI Oscillator slumps oversold zone
The RSI Indicator for PSEC moved into overbought territory on November 05, 2026. Be on the watch for a price drop or consolidation in the future -- when this happens, think about selling the stock or exploring put options.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator is in the oversold zone. Keep an eye out for a move up in the foreseeable future.
The Moving Average Convergence Divergence (MACD) for PSEC just turned positive on October 28, 2026. Looking at past instances where PSEC's MACD turned positive, the stock continued to rise in 26 of 46 cases over the following month. The odds of a continued upward trend are 57%.
Following a +6.93% 3-day Advance, the price is estimated to grow further. Considering data from situations where PSEC advanced for three days, in 121 of 267 cases, the price rose further within the following month. The odds of a continued upward trend are 45%.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on November 05, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on PSEC as a result. In 72 of 100 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 72%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where PSEC declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 59%.
The Aroon Indicator for PSEC entered a downward trend on November 02, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 19 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 81 (best 1 - 100 worst), indicating slightly worse than average price growth. PSEC’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 84 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 92 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.252) is normal, around the industry mean (2.444). P/E Ratio (23.083) is within average values for comparable stocks, (-2.250). Projected Growth (PEG Ratio) (1.548) is also within normal values, averaging (1.319). Dividend Yield (0.101) settles around the average of (0.272) among similar stocks. P/S Ratio (5.432) is also within normal values, averaging (15.694).
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. PSEC’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 80, placing this stock worse than average.
ARCC | PSEC | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 69 | 5 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 86 Overvalued | 92 Overvalued | |
PROFIT vs RISK RATING 1..100 | 26 | 100 | |
SMR RATING 1..100 | 11 | 19 | |
PRICE GROWTH RATING 1..100 | 50 | 81 | |
P/E GROWTH RATING 1..100 | 12 | 84 | |
SEASONALITY SCORE 1..100 | 50 | 50 |
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 (86) in the null industry is in the same range as PSEC (92). This means that ARCC’s stock grew similarly to PSEC’s over the last 12 months.
ARCC's Profit vs Risk Rating (26) in the null industry is significantly better than the same rating for PSEC (100). This means that ARCC’s stock grew significantly faster than PSEC’s over the last 12 months.
ARCC's SMR Rating (11) in the null industry is in the same range as PSEC (19). This means that ARCC’s stock grew similarly to PSEC’s over the last 12 months.
ARCC's Price Growth Rating (50) in the null industry is in the same range as PSEC (81). This means that ARCC’s stock grew similarly to PSEC’s over the last 12 months.
ARCC's P/E Growth Rating (12) in the null industry is significantly better than the same rating for PSEC (84). This means that ARCC’s stock grew significantly faster than PSEC’s over the last 12 months.
| ARCC | PSEC | |
|---|---|---|
| RSI ODDS (%) | 2 days ago 55% | 1 day ago 75% |
| Stochastic ODDS (%) | 2 days ago 29% | 1 day ago 50% |
| Momentum ODDS (%) | 2 days ago 49% | 1 day ago 72% |
| MACD ODDS (%) | 2 days ago 41% | 1 day ago 57% |
| TrendWeek ODDS (%) | 2 days ago 40% | 1 day ago 59% |
| TrendMonth ODDS (%) | 2 days ago 39% | 1 day ago 52% |
| Advances ODDS (%) | 8 days ago 39% | 8 days ago 45% |
| Declines ODDS (%) | 10 days ago 40% | 1 day ago 59% |
| BollingerBands ODDS (%) | 2 days ago 24% | N/A |
| Aroon ODDS (%) | 2 days ago 35% | 1 day ago 38% |
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 overvalued. 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 while PSEC’s FA Score has 1 green FA rating(s).
- ARCC’s FA Score: 3 green, 2 red.
- PSEC’s FA Score: 1 green, 4 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 5 TA indicator(s) are bullish while PSEC’s TA Score has 4 bullish TA indicator(s).
- ARCC’s TA Score: 5 bullish, 5 bearish.
- PSEC’s TA Score: 4 bullish, 3 bearish.
Price Growth
ARCC (@Investment Managers) experienced а +5.02% price change this week, while PSEC (@Investment Managers) price change was -14.51% for the same time period.
The average weekly price growth across all stocks in the @Investment Managers industry was -3.24%. For the same industry, the average monthly price growth was -6.45%, and the average quarterly price growth was -6.12%.
Reported Earning Dates
ARCC is expected to report earnings on Feb 10, 2027.
PSEC is expected to report earnings on Feb 10, 2027.
Industries' Descriptions
@Investment Managers (-3.24% 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.
Advertisement
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% | +2.37% | ||
| OBDC - ARCC | 80% Closely correlated | +2.48% | ||
| GBDC - ARCC | 78% Closely correlated | +2.67% | ||
| BXSL - ARCC | 76% Closely correlated | +3.01% | ||
| CSWC - ARCC | 72% Closely correlated | +2.32% | ||
| MSDL - ARCC | 72% Closely correlated | +2.71% | ||
More | ||||