BDC Comparison
ARCC vs HTGC: Which Is the Better Pick in 2026?
A head-to-head comparison of Ares Capital Corporation and Hercules Capital, Inc. covering yield, cost, risk, and income potential.
Data updated July 21, 2026
Side-by-side snapshot
| ARCC | HTGC | |
|---|---|---|
| Full name | Ares Capital Corporation | Hercules Capital, Inc. |
| Issuer | Ares Management | Hercules Capital |
| Last Close | $18.98 as of July 21, 2026 | $16.06 as of July 21, 2026 |
| Distribution yield | 10.02% | 11.63% |
| Distribution Safety Score™ | 93 | 88 |
| Expense ratio | — | — |
| AUM | — | — |
| Distribution frequency | Quarterly | Quarterly |
| Underlying index | — | — |
| Objective | — | — |
| Asset class | Equity | Equity |
| Inception date | N/A | N/A |
| Beta | 0.62 | 0.738 |
| Last dividend | $0.4800 | $0.4700 |
| Ex-dividend date | 06/15/2026 | 05/14/2026 |
Bottom lineChoose ARCC if you want private-credit income through a business development company. Choose HTGC if you want higher current income (11.63% vs 10.02% for ARCC).
Income calculator
See how much monthly income a hypothetical investment would generate in each business development company at current yields.
Want to go deeper?
Add these BDCs to a sample portfolio and forecast your dividend income over 5+ years — no signup required.
Visual comparison
Key metrics
Projected income on $10K
Projections assume the current yield and share price remain constant. Actual results will vary.
Total returns
ARCC has lagged HTGC over the trailing twelve months, posting a -8.34% total return against -5.58%. The lead holds up over 10 years too: HTGC has compounded at 13.67% a year, against 12.79% for ARCC. ARCC has been the steadier holding, though — annualized volatility of 17.5% against 23.1% for HTGC. Figures are total returns: price change plus every distribution reinvested.
| Symbol | YTD | 1Y | 3Y | 5Y | 10Y | Since Jun 2005 | Volatility | Sharpe | Sortino | Max drawdown |
|---|---|---|---|---|---|---|---|---|---|---|
| ARCC | -2.17% | -8.34% | 8.92% | 9.16% | 12.79% | 11.60% | 17.5% | 0.23 | 0.32 | -19.3% |
| HTGC | -9.42% | -5.58% | 11.41% | 11.17% | 13.67% | 11.85% | 23.1% | 0.28 | 0.36 | -27.1% |
Total return with all distributions reinvested on the ex-dividend date, split-adjusted, as of July 20, 2026. YTD and 1Y are cumulative; longer windows are annualized. “Since Jun 2005” measures every fund from June 9, 2005 — the youngest fund's first trading day — 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.
Quick verdict
ARCC (Ares Capital Corporation) and HTGC (Hercules Capital, Inc.) are both quarterly-pay dividend-paying business development companies (BDCs), but they take different approaches.
HTGC offers the higher yield at 11.63% vs 10.02% for ARCC. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.
Still deciding? Track ARCC & HTGC for free
Create a free Dividend Vision account to keep them on a watchlist, get notified when they declare dividends, and see how much income they would add to your portfolio.
Deep dive
Yield & income
On a $10,000 investment, ARCC would generate roughly $83.50/month, while HTGC would produce $96.92/month, at current distribution rates. Both pay quarterly distributions.
Strategy & risk
ARCC is a business development company, while HTGC is a business development company. Beta is 0.62 for ARCC and 0.738 for HTGC, indicating ARCC is less volatile relative to the market.
Security details
ARCC (Ares Capital Corporation) is a business development company. HTGC (Hercules Capital, Inc.) is a business development company.
Enjoyed this page?
Do us a favor — if you found this comparison useful, please share it with a friend researching dividend investments.
Frequently asked questions
Is ARCC or HTGC better for dividend income?
It depends on your goals. HTGC 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 HTGC?
ARCC (Ares Capital Corporation) is a business development company, while HTGC (Hercules Capital, Inc.) is a business development company. They are issued by Ares Management and Hercules Capital respectively.
Can I hold both ARCC and HTGC?
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.
How much income does $10,000 in ARCC vs HTGC generate?
At current rates, $10,000 in ARCC would generate roughly $83.50 per month ($1,002.00 annually). The same in HTGC would produce about $96.92 per month ($1,163.00 annually).
Which has performed better historically, ARCC or HTGC?
ARCC has lagged HTGC over the trailing twelve months, posting a -8.34% total return against -5.58%. The lead holds up over 10 years too: HTGC has compounded at 13.67% a year, against 12.79% for ARCC. ARCC has been the steadier holding, though — annualized volatility of 17.5% against 23.1% for HTGC. Figures are total returns: price change plus every distribution reinvested. Past performance does not guarantee future results.
More comparisons to explore
People also compare ARCC with
Popular comparisons
ARCC vs HTGC — at a glance
Generated July 2026 from current fund data.
Overview
ARCC and HTGC are both business development companies that lend to and invest in middle-market private companies, generating income through interest payments, fees, and equity stakes. The key distinction: ARCC is substantially larger and has built a more diversified portfolio across sectors and deal sizes, while HTGC maintains a tighter focus on venture debt and smaller growth-stage companies, which supports its higher distribution yield of 11.83% versus ARCC's 10.45%.
How they differ
ARCC and HTGC pursue different lending strategies within the BDC space. ARCC targets established middle-market companies across multiple industries and deal structures, whereas HTGC specializes in venture debt and growth-equity investments in earlier-stage technology and life-sciences firms. That portfolio difference drives the yield gap: HTGC's venture-focused lending commands higher rates, but also carries concentrated sector exposure and earlier-stage credit risk.
HTGC's beta of 0.738 sits modestly higher than ARCC's 0.62, suggesting slightly more sensitivity to broad market moves—a meaningful detail given HTGC's tighter exposure to tech and venture cycles. Both pay quarterly, but their underlying cash flows and refinancing needs differ; ARCC's larger scale and broader borrower base may provide more stable earnings, while HTGC's higher yield reflects the premium lenders demand for venture-stage risk.
Who each is best for
ARCC: Fits investors seeking a lower-volatility BDC exposure with diversified lending across middle-market sectors and a moderate yield that balances current income with capital preservation.
HTGC: Fits investors comfortable with concentrated venture and growth-stage lending, higher yield, and modestly higher beta—typically those seeking maximum income from a BDC and willing to accept sector concentration.
Key risks to know
- Venture-stage credit concentration in HTGC. A material portion of HTGC's portfolio is deployed into early-stage tech and life-sciences companies, which carry higher default risk and longer recovery timelines than ARCC's more established borrowers. Downturns in venture funding or tech valuations can pressure both earnings and NAV.
- NAV erosion if yields rely on return-of-capital. Both BDCs distribute from investment income and realized gains, but if either distributes material amounts as return-of-capital (unrealized appreciation), sustained distributions above earnings may erode per-share net asset value over time. HTGC's higher yield warrants closer scrutiny here.
- Interest-rate sensitivity and refinancing risk. BDCs borrow to fund their portfolios; rising rates increase funding costs and may compress net investment income. HTGC's venture-heavy portfolio may also experience repricing pressure if borrowers face higher refinancing costs.
- Liquidity and secondary-market depth. Both trade actively, but during stress periods BDC spreads widen sharply. ARCC's larger asset base typically provides better liquidity; HTGC's smaller scale may see wider bid-ask spreads and larger price swings during volatility.
Bottom line
If you prioritize diversification across borrower types and sectors with steady, moderate income, ARCC's lower concentration and beta appeal. If you're drawn to venture and growth lending and comfortable with the higher yield and sector concentration HTGC brings, that fund's 11.83% distribution and venture-stage exposure suit a different risk appetite. Past performance does not guarantee future distributions or returns; both BDCs' earnings depend on refinancing costs, borrower health, and venture-market cycles.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.
Still deciding? Compare them against your own portfolio
See how each business development company fits alongside your real holdings — forecast future income, analyze overlap, and gauge risk. Start a free 7-day Dividend Vision trial and make the call with your full portfolio in view.