$100,000 in These 2 Dividend Stocks Could Pay Over $10,000 a Year

Quick Read

• Splitting $100,000 between Ares Capital (ARCC) and Blue Owl (OBDC) generates about $10,578 in annual passive income, a 10.58% combined yield.

• Ares Capital’s $0.46 per-share net investment income trails its $0.48 dividend, yet management points to the pending MidCap Financial (MFIC) deal as reinforcing confidence.

• Blue Owl cut its quarterly base dividend from $0.37 to $0.31, and earnings now comfortably cover it.

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Retirees living on Social Security and a 401(k) usually judge an investment by one thing: how much cash comes each quarter. Business development companies (BDCs) answer that question more directly than most of the market. A BDC loans to and invests in mid-sized private companies. To keep its pass-through tax status, it has to pay out most of its taxable income to shareholders, which is why the group’s yields often reach double digits.

Below is what a $100,000 stake would generate if it were split equally between two of the biggest BDCs, with $50,000 in each. At current forward yields, the pair makes more than $10,000 in annual passive income.

Taxable accounts face one catch. BDC distributions are mostly taxed as ordinary income. Federal law lets shareholders count only the portion a regulated investment company reports as qualified dividend income toward the lower qualified rate (26 U.S.C. § 854(b)(1)(B)), and lending-focused BDCs report very little of that.

Ares Capital

• Stock #2: Ares Capital (NASDAQ:ARCC)

• Yield (forward): 10.02%, based on a $1.92 annualized regular dividend and a $19.17 share price

• Shares for $50,000: 2,608.24

• Annual Passive Income: ~$5,007.82

Ares Capital is the largest publicly traded BDC. Its portfolio covers over 636 companies backed by 271 private equity sponsors and consists mostly of senior secured loans to U.S. middle-market borrowers. The weighted average yield on its debt rose to 10.6% at amortized cost, up from 10.3% at year-end 2025.

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Dividend coverage is tight. Third-quarter net investment income was $328 million, or $0.46 per share, compared with a $0.48 regular dividend. Non-accruals rose to 2.4% from 1.8%, and leverage was 1.15x in the second quarter. Even so, the regular dividend has stayed at $0.48 every quarter since 2023. Chief executive Kort Schnabel said higher yields and the pending MidCap Financial (NASDAQ:MFIC) acquisition reinforce “our confidence in the current level of our regular quarterly dividend.”