All articles tagged with #bdcs
The article discusses the attractive and sustainable dividend yields offered by BDCs, REITs, and MLPs, highlighting their pass-through structures and stable cash flows, while also pointing out sector-specific quirks that investors should be aware of.
Scott Bessent's likely appointment as Treasury Secretary is expected to boost financial deregulation and lending, benefiting private equity and business development companies (BDCs). This environment is favorable for BDCs like the VanEck BDC Income ETF (BIZD), which offers an 11% yield. Bessent's policies may lead to increased M&A activity and sticky inflation, challenging bond investors but creating opportunities for BDCs to thrive.
In the current digital finance era, the focus on short-term trading is prevalent, but some investors prioritize passive income with minimal involvement. Two securities worth holding onto indefinitely are Ares Capital Corporation (ARCC) with a 9.5% yield, benefiting from deep diversification and high-quality management, and RLJ-A Preferred with a 7.8% yield, showing strong performance metrics and potential for perpetual income. Embracing a long-term approach, these investments exemplify the beauty of the Income Method, providing a reliable infusion of cash for steady income.
Ares Capital, a business development company (BDC), is being recommended as an attractive investment option for investors seeking dividend income. With a dividend yield of 9.5%, Ares Capital has consistently outperformed the S&P 500 and stands out among its peers by working with middle-market companies that are underserved by traditional capital providers. The stock is also part of Warren Buffett's portfolio, and its steadily increasing dividend and impressive total returns make it an appealing choice. With a price-to-book ratio below its peak and compared to other leading BDCs, Ares Capital appears to be a bargain opportunity for investors.
Ares Capital and FS KKR Capital are both business development corporations (BDCs) that provide funding to middle-market companies in the U.S. These companies offer high dividend yields due to their regulated investment company status. Ares Capital has a longer track record and a portfolio focused on software, services, and healthcare, while FS KKR has a higher dividend yield and a portfolio concentrated in software, capital goods, and healthcare. Ares Capital has a larger percentage of first lien senior secured loans in its portfolio, while FS KKR trades at a discount to its net asset value. Overall, FS KKR has a slight edge due to its higher dividend yield and improving investment portfolio.