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ARCC vs TSLX
Which Stock Would AI Choose? Ares Capital Corporation (ARCC) vs. Sixth Street Specialty Lending, Inc. (TSLX) Stock Comparison
Key Takeaways
- Both ARCC and TSLX are business development companies (BDCs) delivering high dividend yields around 10%, with ARCC at 10.28% and TSLX at 9.84%.
- ARCC boasts a larger scale with $13.4 billion market cap and $3.05 billion trailing revenue, compared to TSLX's $1.78 billion cap and $449 million revenue.
- TSLX shows stronger year-to-date performance at 11.62% versus ARCC's 5.19%, though both lag broader markets recently.
- Similar valuations with P/E ratios near 10 and low betas under 0.7 indicate comparable stability and income focus.
- Recent market activity reflects private credit sector pressures ahead of Q1 earnings, impacting sentiment for both stocks.
- ARCC trades at a discount to net asset value (NAV), potentially offering better relative positioning.
Introduction
This stock comparison examines ARCC and TSLX, two prominent BDCs providing financing to middle-market companies amid a high-interest-rate environment. Investors seeking high-yield dividends and exposure to private credit may find value in evaluating their business models, performance, and market positioning. With both offering yields exceeding 9% and trading near $18-19 per share, this analysis highlights relative strengths in recent market activity, aiding decisions on income-oriented portfolios or tactical trades.
ARCC Overview and Recent Performance
Ares Capital Corporation (ARCC) is the largest publicly traded BDC, specializing in mezzanine debt, first- and second-lien loans, and equity investments for middle-market firms across sectors like manufacturing, healthcare, and technology. With a $13.4 billion market cap and trailing twelve-month (TTM) revenue of $3.05 billion, it maintains a diversified portfolio. In recent weeks, ARCC shares have hovered around $18.67, reflecting modest YTD gains of 5.19% but pressure from broader private credit concerns and anticipated Q1 earnings challenges, including a projected EPS dip. Sentiment has been tempered by sector risks, though its 10.28% yield and low beta of 0.63 support defensive appeal.
TSLX Overview and Recent Performance
Sixth Street Specialty Lending, Inc. (TSLX) operates as a BDC focused on senior secured loans, mezzanine debt, and equity co-investments for U.S. middle-market companies in software, healthcare, and industrials. Its $1.78 billion market cap and $449 million TTM revenue underscore a more targeted approach. Recent market activity shows shares near $18.69, with robust YTD returns of 11.62% outperforming peers, though recent dips mirror BDC sector weakness ahead of Q1 results. Investor sentiment balances its 9.84% yield and beta of 0.69 against private credit headwinds, with focus on portfolio quality.
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Head-to-Head Comparison
Both ARCC and TSLX operate under the Investment Company Act of 1940 as BDCs, emphasizing income from debt investments, but ARCC’s broader diversification across equity and debt contrasts TSLX’s senior secured emphasis. Growth drivers include portfolio expansion amid middle-market demand, with TSLX showing superior YTD momentum. Recent relative performance favors TSLX slightly, though ARCC’s scale mitigates risk. Low betas signal stability, but ARCC’s NAV discount highlights valuation edge versus TSLX’s premium potential. Market sentiment remains cautious on non-accrual loans and rate sensitivity for both.
Tickeron AI Verdict
Tickeron’s AI currently leans toward ARCC with higher probability for near-term outperformance, driven by its market-leading scale, superior dividend yield, NAV discount, and trend consistency in recent activity. While TSLX exhibits stronger YTD gains, ARCC’s stability and catalysts position it favorably amid BDC sector dynamics.
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 Hold and TSLX is a Hold.
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 2 FA rating(s) are green whileTSLX’s FA Score has 1 green FA rating(s).
- ARCC’s FA Score: 2 green, 3 red.
- TSLX’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 3 TA indicator(s) are bullish while TSLX’s TA Score has 3 bullish TA indicator(s).
- ARCC’s TA Score: 3 bullish, 5 bearish.
- TSLX’s TA Score: 3 bullish, 5 bearish.
Price Growth
ARCC (@Investment Managers) experienced а -2.51% price change this week, while TSLX (@Investment Managers) price change was -1.62% for the same time period.
The average weekly price growth across all stocks in the @Investment Managers industry was -0.21%. For the same industry, the average monthly price growth was -0.44%, and the average quarterly price growth was -7.38%.
Reported Earning Dates
ARCC is expected to report earnings on Jul 28, 2026.
TSLX is expected to report earnings on Aug 04, 2026.
Industries' Descriptions
@Investment Managers (-0.21% 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 | TSLX | ARCC / TSLX | |
| Capitalization | 13B | 1.57B | 829% |
| EBITDA | N/A | N/A | - |
| Gain YTD | -5.738 | -19.988 | 29% |
| P/E Ratio | 11.10 | 14.35 | 77% |
| Revenue | 1.36B | 152M | 895% |
| Total Cash | N/A | N/A | - |
| Total Debt | 15.8B | 1.8B | 876% |
ARCC | TSLX | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 19 | 59 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 3 Undervalued | 8 Undervalued | |
PROFIT vs RISK RATING 1..100 | 31 | 67 | |
SMR RATING 1..100 | 100 | 100 | |
PRICE GROWTH RATING 1..100 | 55 | 72 | |
P/E GROWTH RATING 1..100 | 46 | 34 | |
SEASONALITY SCORE 1..100 | 49 | 85 |
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 TSLX (8). This means that ARCC’s stock grew similarly to TSLX’s over the last 12 months.
ARCC's Profit vs Risk Rating (31) in the null industry is somewhat better than the same rating for TSLX (67). This means that ARCC’s stock grew somewhat faster than TSLX’s over the last 12 months.
ARCC's SMR Rating (100) in the null industry is in the same range as TSLX (100). This means that ARCC’s stock grew similarly to TSLX’s over the last 12 months.
ARCC's Price Growth Rating (55) in the null industry is in the same range as TSLX (72). This means that ARCC’s stock grew similarly to TSLX’s over the last 12 months.
TSLX's P/E Growth Rating (34) in the null industry is in the same range as ARCC (46). This means that TSLX’s stock grew similarly to ARCC’s over the last 12 months.
| ARCC | TSLX | |
|---|---|---|
| RSI ODDS (%) | N/A | 7 days ago 52% |
| Stochastic ODDS (%) | 2 days ago 32% | 2 days ago 53% |
| Momentum ODDS (%) | 2 days ago 29% | 2 days ago 49% |
| MACD ODDS (%) | 2 days ago 36% | 2 days ago 42% |
| TrendWeek ODDS (%) | 2 days ago 37% | 2 days ago 43% |
| TrendMonth ODDS (%) | 2 days ago 44% | 2 days ago 42% |
| Advances ODDS (%) | 7 days ago 39% | 22 days ago 47% |
| Declines ODDS (%) | 11 days ago 41% | 4 days ago 41% |
| BollingerBands ODDS (%) | 2 days ago 66% | N/A |
| Aroon ODDS (%) | 2 days ago 38% | 2 days ago 40% |
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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% | -2.79% | ||
| OBDC - ARCC | 80% Closely correlated | -2.43% | ||
| GBDC - ARCC | 78% Closely correlated | -3.29% | ||
| BXSL - ARCC | 75% Closely correlated | -1.30% | ||
| CSWC - ARCC | 72% Closely correlated | -1.61% | ||
| TSLX - ARCC | 70% Closely correlated | -0.54% | ||
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TSLX and
Correlation & Price change
A.I.dvisor indicates that over the last year, TSLX has been closely correlated with ARCC. These tickers have moved in lockstep 70% of the time. This A.I.-generated data suggests there is a high statistical probability that if TSLX jumps, then ARCC could also see price increases.
| Ticker / NAME | Correlation To TSLX | 1D Price Change % | ||
|---|---|---|---|---|
| TSLX | 100% | -0.54% | ||
| ARCC - TSLX | 70% Closely correlated | -2.79% | ||
| SLRC - TSLX | 69% Closely correlated | -1.20% | ||
| GBDC - TSLX | 69% Closely correlated | -3.29% | ||
| BXSL - TSLX | 67% Closely correlated | -1.30% | ||
| CGBD - TSLX | 66% Loosely correlated | -1.72% | ||
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