Computed head-to-head · 6 dimensions
ARCC vs PSEC
Ares Capital Corp. versus Prospect Capital Corporation — yield, safety, growth trend, cost, scale, and tax treatment.
ARCC wins 4–1 on our six-dimension comparison, but PSEC can still be the better fit depending on your priorities — see each dimension below.
ARCC or PSEC — which is better?
ARCC wins this comparison 4–1 across 6 dimensions. ARCC yields 9.92% — lower than PSEC's 27.02% — and carries a 3.8/10 dividend safety score (Weak) vs 1.9/10 for PSEC (Risky). ARCC wins 4–1 on our six-dimension comparison, but PSEC can still be the better fit depending on your priorities — see each dimension below.
On yield alone, PSEC generates 27.02% vs 9.92% — a 17.10% difference that translates to $17,100 more per year on a $100,000 investment. On dividend safety, ARCC scores 3.8/10 (Weak) vs 1.9/10 (Risky) for PSEC — investors prioritizing income reliability should weight that gap alongside the yield difference.
Scorecard at a glance
| Dimension | ARCC | PSEC | Winner |
|---|---|---|---|
| Yield | 9.92% | 27.02% | PSEC wins |
| Dividend safety | 3.8/10 | 1.9/10 | ARCC wins |
| Growth trend | +0.92% vs 5y | +13.97% vs 5y | ARCC wins |
| Volatility (beta) | 0.63 | 0.81 | ARCC wins |
| Scale | $13.7B | $811M | ARCC wins |
| Tax efficiency | Qualified-eligible | Qualified-eligible | Tie |
| Overall | 4 wins | 1 wins | ARCC wins |
Dimension by dimension
PSEC wins on yield (27.02% vs 9.92%)
On a $10,000 investment that's about $1710 more in annual dividend income before taxes — though higher yield often comes with higher risk.
PSEC's higher yield (27.02%) looks attractive but investors should weigh whether the extra income compensates for any additional risk versus ARCC's 9.92% — especially if the higher yield is driven by covered calls or a falling share price.
ARCC wins on safety (3.8/10 vs 1.9/10)
Our score combines yield zone, payout ratio, trend vs 5-year average, instrument type, and size. ARCC scores better on the weighted average of those factors.
ARCC (3.8/10) scores 1.9 points higher than PSEC (1.9/10). A higher safety score means lower historical indicators of dividend cut risk — payout ratio, yield zone, and trend all factor in.
ARCC shows healthier dividend-vs-price trend
ARCC's yield is 0.92% above its 5y average, versus 13.97% for PSEC. Lower (or below-average) yield trend often means price appreciation outpaced distributions — a healthier signal.
ARCC is less volatile (beta 0.63 vs 0.81)
Lower beta means smaller swings vs the S&P 500 — generally a steadier hold for income investors.
ARCC is 16.9× larger by market cap
Larger companies tend to have tighter spreads, deeper liquidity, and lower closure risk.
Both pay qualified-dividend-eligible distributions
Neither is structurally flagged for ordinary-income tax treatment. Most distributions should qualify for the lower long-term capital gains rate if holding-period requirements are met.
Full breakdown per ticker: are ARCC dividends qualified and are PSEC dividends qualified — each with the after-tax income at every federal bracket.
How we compare these
Every comparison on this page is computed from current public data, not written by hand. Yield comes from the most recent dividend distribution annualized over current price. Safety scores combine yield zone, payout ratio, trend vs 5-year average, instrument type, and size — see our methodology for the exact formula. Tax-efficiency flags identify covered-call ETFs, REITs, and mREITs which distribute primarily as ordinary income.
This is educational, not investment advice. Scores reflect a snapshot of public data on the "as of" dates shown on each ticker's safety page. Verify on the issuer's investor relations page or your brokerage before making decisions.
Frequently asked
ARCC or PSEC — which is better?
ARCC is better on our scoring, winning 4–1 across six dimensions: yield, dividend safety, growth, cost, scale, and tax treatment. ARCC wins 4–1 on our six-dimension comparison, but PSEC can still be the better fit depending on your priorities — see each dimension below.
Which is better for income, ARCC or PSEC?
ARCC wins 4–1 on our six-dimension comparison, but PSEC can still be the better fit depending on your priorities — see each dimension below.
ARCC vs PSEC: which has a higher dividend yield?
ARCC yields 9.92% and PSEC yields 27.02%. On a $10,000 investment that's about $1710 more in annual dividend income before taxes — though higher yield often comes with higher risk.
Is ARCC or PSEC a safer dividend in 2026?
ARCC scores 3.8/10 (Weak) on the Infnits dividend safety scale. PSEC scores 1.9/10 (Risky). ARCC is the safer pick on our scoring model.
Which has better dividend growth, ARCC or PSEC?
ARCC's yield is 0.92% above its 5y average, versus 13.97% for PSEC. Lower (or below-average) yield trend often means price appreciation outpaced distributions — a healthier signal.
ARCC vs PSEC: which is more tax-efficient?
Neither is structurally flagged for ordinary-income tax treatment. Most distributions should qualify for the lower long-term capital gains rate if holding-period requirements are met.
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Compare both against your actual holdings
Put ARCC and PSEC into the free analyzer with the rest of your portfolio. You'll see what each one contributes to your annual income, your weighted safety score, and whether adding ARCC diversifies you or just duplicates what you hold. No account, no download.