Published Fri, 31 Jul 2020 11:45:50 -0400 on Seeking Alpha
Seeking AlphaDividend Ideas | Financials Technical Pressure Driving 12% Yield For Owl RockJul. 31, 2020 11:45 AM ET|| About: Owl Rock Capital Corporation (ORCC), Includes: AINV, ARCC, FSK, FSKR, GBDC, GLAD, GLADD, MAIN, NMFC, NMFX, PBB, PBC, PSECby: BDC BuzzBDC Buzz Sustainable DividendsBuild a portfolio with sustainable dividend yields ranging from 8% to 12%SummaryAs expected, BDCs are starting to report NAV per share increases and reaffirming their dividends which is driving some stocks to rally.
Most BDCs report results next week that will likely drive some positive headlines and another rally in BDC pricing as investors are looking to improve portfolio yield/returns.
ORCC is a higher-quality BDC that released preliminary results but currently has selling pressure related to lock-up expiration of pre-IPO shares as shown below.
Quick BDC Market Update
As mentioned in previous articles, I'm expecting many Business Development Companies ("BDCs") to report 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 have begun reporting results including Gladstone Capital (GLAD) with a 4% increase in book value, proper dividend coverage, and lower non-accruals:
Gladstone Capital Corporation Reports Financial Results for its Third Quarter Ended June 30, 2020 Bob Marcotte: "The ramifications and impact of COVID-19 last quarter were certainly unprecedented; however, we are pleased to report that, on balance, our portfolio performed well, our non-accrual assets declined, and we were able to close on several attractive investments to grow our earning asset base and lift our core net interest income, which are all key drivers to maintain and grow our shareholder distributions. While there may be additional challenges ahead, and we have a ways to go to fully recover from the unrealized... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|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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