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Assessing Risk: Retirement Portfolio Using BDCs Yielding 10%+

Published Thu, 11 Jul 2019 06:01:04 -0400 on Seeking Alpha

This article is a follow-up to "Part 1: Building A Retirement Portfolio With BDCs" that discussed retirement portfolio allocations including BDC stocks and their Baby Bonds as well as the timing for investing in the sector especially as it was/is headed into 'oversold' territory. As BDCs start to report June 30, 2019 results later this month (see schedule below), investors should be watching for potential portfolio credit issues.

What is a BDC?
Business Development Companies ("BDCs") were created by Congress in 1980 to give investors an opportunity to invest in private small and mid-sized U.S. companies typically overlooked by banks. Most BDCs are publicly traded with a highly transparent structure subject to oversight by the SEC, states and other regulators, providing investors with higher than average dividend yields (most between 7% and 13% annually, see details below) by avoiding taxation at the corporate level. This allows them to pass along ordinary income and capital gains directly to the shareholder.

Why do I like BDCs?
I like the idea of investing in companies that provide capital to smaller private businesses often unable to get growth capital from typical banks. Also, BDC stock pricing can be volatile which can be a good thing for investors that watch closely and take advantage of 'oversold' conditions. BDC fundamentals remain strong/stable including a healthy U.S. economy, low market defaults and most BDCs focused on protecting shareholder... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
GARRISON CAPITAL 6.99   0.0 -0.08 0.92 13.16
THL CREDIT 6.64   0.0 -0.51 0.84 12.63
MONROE CAPITAL 11.28   19.4 0.58 1.40 12.38
BLACKROCK KELSO CAPITAL 5.99   66.6 0.09 0.72 11.80
PENNANTPARK INVESTMENT 6.59   14.6 0.45 0.72 11.41
APOLLO INVESTMENT 16.27   16.1 1.01 1.80 10.96
PROSPECT CAPITAL 6.63   11.0 0.60 0.72 10.75
CAPITALA FINANCE 9.87   0.0 -1.06 1.00 10.07
TCP CAPITAL 14.14   19.6 0.72 1.44 10.06
OAKTREE SPECIALTY LENDING 4.90   0.0 -1.39 0.50 10.02
HERCULES TECH GROWTH CAP 13.00   9.2 1.42 1.28 9.85
PENNANTPARK FLOATING RATE CAPITAL 11.63   29.1 0.40 1.14 9.73
FIDUS INVESTMENT 16.12   8.6 1.87 1.56 9.57
GOLDMAN SACHS BDC 19.75   21.2 0.93 1.80 9.12
GLADSTONE CAPITAL 9.52   31.7 0.30 0.84 8.83
ARES CAPITAL 18.15   9.3 1.95 1.60 8.77
SOLAR SENIOR CAPITAL 16.33   16.8 0.97 1.41 8.57
MEDLEY CAPITAL 2.47   0.0 -1.55 0.20 7.91
CAPITAL SOUTHWEST 21.29   10.0 2.12 1.56 7.38
GLADSTONE INVESTMENT 11.27   4.5 2.48 0.82 7.16
GOLUB CAPITAL BDC 17.98   14.7 1.22 1.28 7.10
MAIN STREET CAPITAL 41.62   14.4 2.89 2.46 5.78

GARRISON CAPITAL - GARS
GARRISON CAPITAL - GARS  


Older articles featuring Garrison Capital (GARS):
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67 10%+ Dividend Yield Top Dogs Chase April Affluence
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69 February 10%+ Dividend Yield WallStars Have Heart
Is FS KKR Capital's 12.2% Yield At Risk?
101 End-O-December 10%+ Yield Dividend WallStars Toast Tremendous Target Gains And A Merger
Dividends By The Numbers In 2018
Monroe Capital Offers 15% Yield Due To Portfolio Credit Issues
Your 50 Financial WallStars Show Bountiful Yields With Net Gains For November 2019
Why I Sold This 11.1% Yielding BDC That Could Now Be A 'Buy'

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