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Dividend Increases For The High-Yield BDC Sector: Part 2

Published Sun, 10 Feb 2019 09:36:03 -0500 on Seeking Alpha

Business development companies, or BDCs, have begun reporting results, and this article discusses some of the items that investors should be watching.

Sources: SEC Filings and www.bdcbuzz.com.
In December 2018, I purchased additional shares of multiple 'oversold' higher-quality BDCs with risk-averse balance sheets prepared for a potential economic slowdown including Ares Capital (ARCC) at $15.27 for the reasons discussed in this article.
As investors jump back into financial stocks, the average BDC has easily outperformed the S&P 500 so far in 2019, but still has an average dividend yield of around 10.4%. It should also be noted that the average BDC continually outperforms high-yield corporate bond ETFs such as the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and the SPDR Bloomberg Barclays High Yield Bond ETF (JNK), and UBS ETRACS Wells Fargo Business Development Company ETN (BDCS).

Sources: SEC Filings and www.bdcbuzz.com.
Over the last eight weeks, I have had focus articles discussing MRCC, GAIN, OCSL, CGBD, FSK, HTGC, TPVG, GSBD, TCRD, PSEC, and PNNT.
ARCC had better price performance through December 31, 2018, and was not as oversold going into 2019 which is likely why it has not appreciated as much as the others.
It is interesting to note that BDCs with exposure to collateralized loan obligations (CLOs) such as PSEC, KCAP, and OXSQ are not having a good year so far.
BDC Dividend Changes For 2019
As mentioned in many... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
MONROE CAPITAL 10.22   17.9 0.57 1.40 13.44
THL CREDIT 6.63   0.0 -0.86 0.84 12.92
PENNANTPARK INVESTMENT 6.39   22.0 0.29 0.72 11.41
APOLLO INVESTMENT 16.05   13.6 1.18 1.80 11.32
PROSPECT CAPITAL 6.53   10.9 0.60 0.72 11.20
KOHLBERG CAPITAL 3.75   0.0 -0.25 0.40 11.05
TCP CAPITAL 13.32   28.3 0.47 1.44 10.84
FIDUS INVESTMENT 14.69   8.7 1.69 1.56 10.69
OAKTREE SPECIALTY LENDING 4.90   0.0 -1.39 0.50 10.02
HERCULES TECH GROWTH CAP 12.66   9.6 1.32 1.28 9.99
PENNANTPARK FLOATING RATE CAPITAL 11.50   29.5 0.39 1.14 9.86
MEDLEY CAPITAL 2.55   0.0 -1.62 0.25 9.43
GOLDMAN SACHS BDC 19.33   21.5 0.90 1.80 9.09
GLADSTONE CAPITAL 9.40   62.7 0.15 0.84 9.02
GLADSTONE INVESTMENT 11.52   6.9 1.67 0.82 7.17
GOLUB CAPITAL BDC 18.34   15.5 1.18 1.28 6.97
MAIN STREET CAPITAL 42.47   16.5 2.57 2.46 5.80
SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF 107.14   0.0 0.00 6.10 5.66
ISHARES IBOXX $ HIGH YIELD CORPORATE BOND FUND 85.81   0.0 0.00 4.60 5.33
 

MONROE CAPITAL - MRCC
MONROE CAPITAL - MRCC  


Older articles featuring Monroe Capital (MRCC):
Still Waiting For A Dividend Increase From Oaktree
Assessing Risk: Retirement Portfolio Using BDCs Yielding 10%+
Building A Retirement Portfolio With BDCs Currently Yielding 10.6%
Prospect Capital: Upcoming Credit Issues And 11%+ Yielding Replacement
Yield-Starved Investors Still Accumulating BDCs Paying More Than 10% Annually
10% Yielding New Mountain Finance Receives Fitch Rating
Apollo Investment: 12% Yield Supported By Improving Portfolio Quality
Strong Buy With 12% Yield With 30%+ Return Potential: TCG BDC
My Dividend Growth Portfolio Off To A Good Start In 2019
Dividend Cuts For The High-Yield BDC Sector

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