$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.

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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

ARCC price target — ARCC Price Target — 24/7 Wall St.

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.”

Credit is the main risk. NAV per share slipped to $19.31 from $19.94, and the third quarter included $52 million of net realized losses. In a slowdown, more loans going non-accrual would widen the shortfall. Ares also refinanced 2.150% notes with $750 million of 6.250% notes, which raises interest costs. On the other side, its backlog has grown to about $2.5 billion.

ARCC analyst ratings — ARCC Analyst Ratings — 24/7 Wall St.

Blue Owl Capital Corp.

Stock #1: Blue Owl Capital Corp. (NYSE:OBDC)
Yield (forward, base dividend only): 11.14%, based on a $1.24 annualized base dividend and an $11.13 share price
Shares for $50,000: 4,492.36
Annual Passive Income: ~$5,570.53

OBDC price target — OBDC Price Target — 24/7 Wall St.

Blue Owl makes direct loans to U.S. middle-market companies. Its portfolio has a fair value of $15.1 billion across 233 companies. First-lien senior secured loans make up 73.1% of the book, and about 95.5% of its debt investments are floating rate.

Blue Owl cut its base dividend to $0.31 from $0.37 in 2026 to align it with earnings power. The forward yield above uses that new base. Coverage is now solid: third-quarter adjusted NII was $0.33 per share. Chief executive Craig W. Packer said, “Earnings continued to cover the base dividend comfortably, and NAV increased 40 basis points.” Non-accruals were 2.9% at cost, and net debt-to-equity was 1.13x. The $0.01 supplemental payment is excluded from the income figures.

The main risk is interest rates. Three-month SOFR has risen to 4.08% from 3.73%, but if short-term rates fall again, income on the floating-rate book shrinks. Management bought back $35 million of stock below NAV in the third quarter.

OBDC analyst ratings — OBDC Analyst Ratings — 24/7 Wall St.

Income Breakdown at a Glance

What $100,000 in BDCs Produces

Together, these two positions make $10,578.35 of passive income each year on a $100,000 investment, a combined yield of 10.58%. Ares Capital brings $5,007.82, and Blue Owl adds $5,570.53.

Reinvesting that income speeds up the compounding. Each quarterly payment buys more shares, and those shares pay their own distributions (we outlined a full plan for turning a mid six-figure balance into reliable monthly income in a free report here). In the future, watch Ares’s dividend coverage, the MidCap deal’s closing, Blue Owl’s non-accruals, and SOFR.

Learn 7 Ways To Generate Income With A $1,000,000+ Portfolio

If you’ve saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life.

Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor)

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Source: finance.yahoo.com