MAIN vs ARCC vs HTGC vs CSWC vs TSLX – 10 Years of Dividend Income Growth

Introduction

A high starting dividend yield can be attractive, but how does that income develop over time? This visualization compares five established business development companies (BDCs): Main Street Capital (MAIN), Ares Capital (ARCC), Hercules Capital (HTGC), Capital Southwest (CSWC), and Sixth Street Specialty Lending (TSLX). By tracking annual yield on cost from 2016 through 2025, the chart highlights differences in income growth, payout consistency, and the influence of special and supplemental dividends.

Key insights

• CSWC delivered the strongest income expansion

  Capital Southwest's yield on cost increased from 1.6% in 2016 to 20.0% in 2025, representing approximately 32.0% annualized dividend growth. However, this exceptional growth began from a low dividend base following its 2015 restructuring. Special distributions also contributed to its early income spikes, making its historical growth rate less representative of a steady, recurring trend.

• MAIN and HTGC followed different paths to higher income

  Main Street Capital increased its yield on cost from 9.6% to 14.9%, with approximately 5.0% annualized dividend growth. Total distributions declined in 2020 before recovering and reaching new highs. Hercules Capital began with a higher yield on cost of 11.3% and finished at 17.1%. Its strongest income expansion occurred after 2020, although distributions moderated slightly from their 2022 peak. Both generated meaningful long-term income growth, but their annual distribution patterns differed.

• ARCC demonstrated steadier growth, while TSLX experienced a notable spike

  Ares Capital's yield on cost increased from 10.8% to 13.6%, with annual dividends remaining unchanged at $1.92 per share from 2023 through 2025. Sixth Street Specialty Lending followed a more variable path. Its yield on cost climbed above 20% in 2021, supported by a large special distribution, before declining to 11.6% in 2025. The contrast illustrates why investors should distinguish recurring dividend growth from temporary increases driven by special payments.

• The highest starting yield did not produce the highest ending income

  HTGC began with the highest yield on cost among the five companies, while CSWC started with the lowest. By 2025, CSWC had the highest yield on cost, followed by HTGC, MAIN, ARCC, and TSLX. The comparison demonstrates that starting yield and subsequent dividend growth can produce very different long-term income outcomes.

Methodology

The visualization calculates annual yield on cost by dividing each company's total dividends paid per share during a calendar year by its original 2016 starting share price. The analysis covers 2016 through 2025 and includes regular, supplemental, and special dividends based on payment dates. The original share price remains fixed throughout the comparison. Yield on cost therefore measures annual dividend income relative to the initial purchase price, not the stock's current market yield. Dividend reinvestment and share price appreciation are excluded. The visualization does not measure total investment returns. Special distributions can create temporary income spikes, and historical dividend growth does not guarantee future increases.

Related links

• Blog article
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