Ares Capital (NASDAQ:ARCC) is one of the market's leading business development companies or BDC. It has a well-diversified portfolio in direct lending and a relatively small exposure in equity investments. Ares Capital's portfolio comprises mostly floating-rate securities, accounting for 69% of its portfolio fair value. Hence, the BDC has capitalized on the rapid interest rate hikes to drive its core EPS. In addition, Ares Capital's higher "defensive" exposure in software and healthcare helps the company avoid the cyclical uncertainties linked to industries such as oil and gas, hotels, and gaming.