BDC Comparison
ARCC vs FSK: Which Is the Better Pick in 2026?
A head-to-head comparison of Ares Capital Corporation and FS KKR Capital Corp. covering yield, cost, risk, and income potential.
Updated October 16, 2026
How these figures are calculated: methodology.
Best for
- ARCCInvestors who want private-credit income through a business development company.
- FSKInvestors who want higher current income (19.75% vs 10.26% for ARCC).
Visual comparison
Key metrics
Projected income on $10K
Projections assume the current yield and share price remain constant. Actual results will vary.
Total returns
100% reinvested · ex-date convention. Period returns use this fixed assumption, independent of chart settings. YTD and 1Y are cumulative period returns; 3Y, 5Y, and 10Y are annualized. The shared Since-start window is annualized only when it covers at least one year.
ARCC has outpaced FSK over the trailing twelve months, posting a 5.93% total return against -17.02%. The lead holds up over 10 years too: ARCC has compounded at 12.22% a year, against 0.81% for FSK. ARCC has been the steadier holding, though — annualized volatility of 17.7% against 25.4% for FSK. Figures are total returns: price change plus every distribution reinvested.
| Symbol | YTD cumulative | 1Y cumulative | 3Y annualized | 5Y annualized | 10Y annualized | Since Apr 2014 | Volatility | Sharpe | Sortino | Max drawdown |
|---|---|---|---|---|---|---|---|---|---|---|
| ARCC | -0.09% | 5.93% | 8.40% | 7.48% | 12.22% | 10.69% | 17.7% | 0.22 | 0.31 | -19.3% |
| FSK | -20.96% | -17.02% | -5.75% | -1.02% | 0.81% | 1.84% | 25.4% | -0.40 | -0.52 | -51.0% |
Total return with all distributions reinvested on the ex-dividend date (a modeling convention, not the cash-settlement date), split-adjusted, as of October 16, 2026. YTD and 1Y are cumulative period returns; 3Y, 5Y, and 10Y are annualized. The shared Since-start window is annualized only when it covers at least one year. “Since Apr 2014” measures every fund from April 16, 2014 — the start of shared available history — so all funds share one comparison window. Volatility is the annualized standard deviation of daily total returns over the trailing 3 years. Sharpe and Sortino divide the annualized return in excess of the risk-free rate by, respectively, that volatility and the downside deviation (both over the trailing 3 years) — higher is better. Max drawdown is the largest peak-to-trough total-return decline over the same window — shallower is better.
Side-by-side snapshot
| Metric |  ARCC |  FSK |
|---|---|---|
| Full name | Ares Capital Corporation | FS KKR Capital Corp. |
| Issuer | Ares Management | FS Investments |
| Last Close | $18.72 as of October 16, 2026 | $10.33 as of October 16, 2026 |
| Distribution rate | 10.26% | 19.75% |
| Trailing 12-month yield | 10.26% | 19.75% |
| Distribution Safety Score™ | 90 | 23 |
| Safety-Adjusted Yield | 9.23% | 4.54% |
| Expense ratio | — | — |
| AUM | — | — |
| Distribution frequency | Quarterly | Quarterly |
| Underlying index | — | — |
| Objective | — | — |
| Asset class | Equity | Equity |
| Inception date | N/A | N/A |
| Beta | 0.66 | 0.925 |
| Last dividend | $0.48 | $0.44 declared |
| Ex-dividend date | 09/15/2026 | 12/01/2026 upcoming |
Bottom lineChoose ARCC if you want private-credit income through a business development company. Choose FSK if you want higher current income (19.75% vs 10.26% for ARCC).
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Quick verdict
ARCC (Ares Capital Corporation) and FSK (FS KKR Capital Corp.) are both quarterly-pay dividend-paying business development companies (BDCs), but they take different approaches.
FSK offers the higher yield at 19.75% vs 10.26% for ARCC. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.
Who should choose each?
Choose ARCC
Ares Capital Corporation
- Want private-credit exposure — a BDC lending to middle-market companies.
- Prefer lower volatility — a beta of 0.7 vs 0.9 for FSK.
Choose FSK
FS KKR Capital Corp.
- Want higher current income — FSK yields 19.75% vs 10.26% for ARCC.
- Want private-credit exposure — a BDC lending to middle-market companies.
Not sure? Use the income calculator and snapshot above to weigh these trade-offs against your own goals.
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Deep dive
Yield & income
On a $10,000 investment, ARCC would generate roughly $256.50 cash per distribution, while FSK would produce $493.75 cash per distribution, at current distribution rates. Both pay quarterly distributions.
Strategy & risk
ARCC is a business development company built around BDC exposure, while FSK is a business development company built around BDC exposure. Beta is 0.66 for ARCC and 0.925 for FSK, making ARCC the less volatile of the two by this measure.
Security details
ARCC (Ares Capital Corporation) is a business development company. FSK (FS KKR Capital Corp.) is a business development company.
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Frequently asked questions
What is the current distribution rate for ARCC and FSK?
ARCC currently distributes 10.26% and FSK 19.75%, based on fund data updated October 2026. Distribution rate moves with both the payout and the share price, so check the as-of date before relying on either figure.
Is ARCC or FSK better for dividend income?
It depends on your goals. FSK currently offers the higher distribution yield, which means more income per dollar invested. However, a lower-yield fund may offer better total return or lower volatility. Consider your time horizon and risk tolerance.
What is the difference between ARCC and FSK?
ARCC (Ares Capital Corporation) is a business development company built around BDC exposure, while FSK (FS KKR Capital Corp.) is a business development company built around BDC exposure. They are issued by Ares Management and FS Investments respectively.
Can I hold both ARCC and FSK?
Yes — nothing prevents holding both. Whether the combination actually diversifies depends on how much the underlying exposures overlap, which isn't fully measurable from the data on this page; review each security's holdings, sector, and strategy before treating them as complementary.
Is ARCC or FSK safer?
By Dividend Vision's Distribution Safety Score — a rules-based 0–100 estimate of how resilient a distribution looks, where higher is safer — ARCC scores 90, FSK scores 23, so ARCC's payout currently looks the more resilient of the two. ARCC has also shown lower price volatility (beta 0.66 vs 0.93 for FSK). No score makes an investment risk-free — treat this as a screening signal, not a guarantee, and the leverage, options-income, or crypto caveats flagged on this page apply regardless of score.
How much income does $10,000 in ARCC vs FSK generate?
At current rates, $10,000 in ARCC would generate roughly $256.50 cash per distribution ($1,026.00 annually). The same in FSK would produce about $493.75 cash per distribution ($1,975.00 annually).
Which has performed better historically, ARCC or FSK?
ARCC has outpaced FSK over the trailing twelve months, posting a 5.93% total return against -17.02%. The lead holds up over 10 years too: ARCC has compounded at 12.22% a year, against 0.81% for FSK. ARCC has been the steadier holding, though — annualized volatility of 17.7% against 25.4% for FSK. Figures are total returns: price change plus every distribution reinvested. Past performance does not guarantee future results.
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ARCC vs FSK — at a glance
Generated October 17, 2026.
Overview
ARCC and FSK are both business development companies—publicly traded vehicles that lend to and invest in middle-market private companies. The key distinction is their leverage and payout strategy: ARCC is the larger, more established BDC with a 10.26% distribution rate, while FSK operates a more aggressive capital structure and delivers a 19.75% distribution rate, nearly double ARCC's yield.
How they differ
The biggest difference is distribution rate. FSK yields 19.75%, compared to ARCC's 10.26%—a gap of roughly 9.5 percentage points.
Second, FSK carries higher systematic risk. Its beta of 0.925 sits materially above ARCC's beta of 0.66, indicating FSK moves more sharply with broad market swings. This can amplify both gains and losses in rising and falling rate environments.
Third, ARCC trades at a notably higher share price ($18.72 vs. $10.33), a structural difference that affects position sizing and trading mechanics but does not directly determine value—share price alone reveals nothing about per-dollar value or portfolio quality.
Who each is best for
ARCC: Fits investors seeking lower volatility and a more sustainable distribution yield from a larger, longer-established BDC sponsor, who can tolerate quarterly income but prefer a more measured payout ratio.
FSK: Designed for income-focused allocators comfortable with higher leverage, increased equity beta, and a yield that may incorporate return-of-capital, who prioritize current cash flow over principal preservation and have the risk appetite for a smaller BDC.
Key risks to know
- NAV erosion at high distribution rates. FSK's 19.75% yield is roughly 4–5 times the average S&P 500 dividend yield, creating a structural likelihood that distributions will exceed net investment income over time, necessitating return-of-capital and eroding book value per share absent strong portfolio appreciation.
- Leverage and credit-cycle sensitivity. Both BDCs are inherently leveraged vehicles whose underlying loan portfolios are vulnerable to economic slowdown. FSK's higher beta and elevated yield suggest greater leverage, amplifying downside risk when borrowers face stress.
- Interest-rate and refinancing risk. BDCs fund investments through debt issuance. Rising rates increase borrowing costs; if net interest income cannot keep pace, distribution coverage weakens and payouts may require capital depletion.
- Concentration in middle-market lending. These vehicles are concentrated in illiquid, private debt and equity. Valuation marks on portfolio companies are often management estimates rather than market prices, creating opacity and potential for surprise markdowns.
Bottom line
If you want a lower-volatility BDC with a more conservative 10%+ payout and established scale, ARCC's 10.26% yield and 0.66 beta appeal to steady income seekers. If you prioritize current yield and accept higher leverage and equity beta, FSK's 19.75% distribution attracts those with shorter time horizons and greater risk tolerance—but investors should verify that FSK's payout sustainability and consider whether its distribution includes significant return-of-capital treatment. Past performance does not guarantee future results.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.
Learn the method
The metrics behind this comparison, explained in the Academy.
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These comparisons follow the Dividend Vision methodology.