Published Fri, 17 Jul 2020 11:18:16 -0400 on Seeking Alpha
Seeking AlphaDividend IdeasPreliminary Q2 Results For The BDC Sector Currently Yielding 13%Jul. 17, 2020 11:18 AM ET|| Includes: AINV, ARCC, BKCC, FSK, GARS, GBDC, GLAD, GLADD, GSBD, HTGC, KCAPL, MAIN, MRCC, MRCCL, NMFC, NMFX, ORCC, OXSQ, PFLT, PNNT, PSEC, PTMN, TCPC, TPVG, TSLXby: BDC BuzzBDC Buzz Sustainable DividendsBuild a portfolio with sustainable dividend yields ranging from 8% to 12%SummaryAs expected, BDCs are starting to reaffirm their dividends which is driving some stocks to rally as investors figure out that the sky is not falling in this higher yield sector.
Also, BDCs are reporting increases in portfolio values that will be driving NAV higher for Q2 2020.
This article discusses two BDCs that will likely be reporting stronger-than-expected results in the coming weeks.
Quick BDC Market Update
As mentioned in previous articles, I'm expecting many BDCs to report stronger-than-expected results including net asset value "NAV" increases, adequate dividend coverage, and reaffirming current dividends. Please see "Upcoming NAV Changes For The BDC Sector Yielding 14%" for discussion of why we will likely see many BDCs with increased NAV.
BDCs will start reporting results in less than two weeks and will likely drive some positive headlines and another rally in BDC pricing as investors are looking to improve portfolio yield/returns in this low-yield environment. Please see the end of this article for a special offer to help subscribers get their portfolio in order before earning season.
Clearly the potential for additional or renewed lockdowns related to COVID-19 is a concern driving markets lower, including BDCs that are now yielding over 13% (see list below). It should be noted that the yields for PTMN and BKCC are likely less as PTMN is merging with GARS and BKCC is only paying 20% of its dividend in cash (the rest is in stock). The change to BKCC's dividend was not announced on Seeking Alpha but you can see the release here:
BlackRock... 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|
|PENNANTPARK FLOATING RATE CAPITAL||11.68||30.0||0.39||1.14||9.81|
|HERCULES TECH GROWTH CAP||13.26||10.0||1.32||1.28||9.55|
|GOLDMAN SACHS BDC||20.29||22.5||0.90||1.80||8.88|
|GOLUB CAPITAL BDC||18.55||15.7||1.18||1.28||6.89|
|MAIN STREET CAPITAL||43.18||16.8||2.57||2.46||5.69|
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