Ares Capital’s 11% yield nearly covers $100K annually on $935K, but Q1 2026 EPS slipped below its payout.
A $1 million dividend portfolio targeting $100,000 in annual income demands a blended 10% yield, achievable only through high-risk assets like business development companies (BDCs) or mortgage REITs. Ares Capital, yielding 11%, nearly meets the goal with $935K in capital, but its Q1 2026 core EPS of $0.47 fell short of its $0.48 quarterly payout.
Main Street Capital, with a 6% yield, requires $1.67M to generate $100K annually, while its shares have dropped 11% year-to-date. A 25% cut to the highest yielder could erase $12,500 in annual income, highlighting the volatility of high-yield dividend strategies.
Stable dividend growers like Coca-Cola and Johnson & Johnson avoid cut risks but offer lower yields, underscoring the trade-off between income stability and high payouts in cyclical sectors.