The NFIB Small Business Optimism Index reported a resurgence in small business sentiment, rising for two consecutive months as of April 2023. This shift is attributed largely to the adoption of artificial intelligence tools, such as ChatGPT, which small business owners are utilizing for various operational tasks.
Ares Capital (ARCC), the largest Business Development Company (BDC) with over $22 billion in assets, reported a net investment income of $0.50 per share, covering its $0.48 dividend. ARCC maintains a low delinquency rate of just 1.5%. Similarly, Main Street Capital (MAIN) targets smaller companies with annual revenues between $25 million and $500 million and has shown robust growth in dividends, recently paying out $4.11 per share, which reflects a 174% increase over the past 15 years. MAIN currently offers a 7.2% yield, while ARCC provides an 8.8% yield.
With small business optimism improving and the backing of AI tools fostering growth, both ARCC and MAIN position themselves as strong options for investors, offering a blended yield of 8.1% at present.
