Dividend-News

Daily dividend news for investors in dividend stocks


Why I Sold This 11.1% Yielding BDC That Could Now Be A 'Buy'

Published Thu, 11 Oct 2018 08:35:20 -0400 on Seeking Alpha

Recent BDC Pricing Volatility Readers may have noticed the recent volatility in BDC pricing over the last two weeks. Please see "BDC Market Update: October 9, 2018", that discussed current yield spreads, sector oversold/overbought measures, and recently improved BDC fundamentals including higher portfolio yields, improved net interest margins, improvements in underlying general economic fundamentals including unemployment rate, labor force participation, consumer consumption and corporate earnings.
However, I am expecting temporarily lower BDC prices for the reasons discussed in the update including widening of rate spreads and general market volatility driving ‘flight to safety’. As you can see, the average BDC yield is currently trending higher:

Source: SEC Filings and BDC Buzz.com

As mentioned in "Upcoming BDC Dividend Cuts For Q3 2017", I previously sold shares in FS Investment Corp (FSIC) due to the predicted dividend reduction and my previous public FSIC article "10% Yield And 18% Discount To Book: Priced For Upcoming Credit Issues?", focused on the growing amount of investments with a rating of ‘3’:

Immediately after FSIC reported Q2 2018 results on August 9, 2018, I sold my remaining shares (before the recent decline shown below) for the reasons discussed in this article.

Obviously, timing is important when investing, but especially with business development companies... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
BLACKROCK KELSO CAPITAL 5.25   0.0 -0.12 0.56 13.61
GARRISON CAPITAL 6.94   0.0 -0.17 0.92 13.35
CAPITALA FINANCE 8.19   0.0 -3.13 1.00 12.46
THL CREDIT 6.96   0.0 -0.86 0.84 12.09
KOHLBERG CAPITAL 3.75   0.0 -0.25 0.40 11.05
PROSPECT CAPITAL 6.71   16.8 0.40 0.72 10.76
APOLLO INVESTMENT 16.78   14.2 1.18 1.80 10.73
TCP CAPITAL 13.75   29.3 0.47 1.44 10.48
HORIZON TECHNOLOGY FINANCE 11.85   9.5 1.25 1.20 10.12
OAKTREE SPECIALTY LENDING 4.90   0.0 -1.39 0.50 10.02
GOLDMAN SACHS BDC 20.29   22.5 0.90 1.80 8.88
ALCENTRA CAPITAL 8.91   14.1 0.63 0.72 8.04
OAKTREE STRATEGIC INCOME 8.10   19.8 0.41 0.62 7.51
GOLUB CAPITAL BDC 18.55   15.7 1.18 1.28 6.89
MEDLEY CAPITAL 2.61   0.0 -1.62 0.15 5.81

BLACKROCK KELSO CAPITAL - BKCC
BLACKROCK KELSO CAPITAL - BKCC  


Older articles featuring Blackrock Kelso Capital (BKCC):
Earn An 8% To 10% Balanced Portfolio Yield Investing In America: Part 1
Quick BDC Market Update: 18% Average Yield But Continued Volatility
Why Investors Are Selling 12% Yielding Monroe Capital
Juul Investor BlackRock TCP Capital Currently Yielding 10.3%
Building A Retirement Portfolio With 6% To 9% Yield: Apollo Investment
Building A Retirement Portfolio With 6% To 9% Yield: Part 5
Building A Retirement Portfolio With 6% To 9% Yield: Part 4
Building A Retirement Portfolio With 6% To 9% Yield: Part 2
Building A Retirement Portfolio With 6% To 9% Yield: Part 1
BIZD: Attractive 9% Yield, But Widening Credit Spreads A Risk

More