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PennantPark Investment: 55% Discount To Book Driving 14% Yield

Published Tue, 01 Sep 2020 12:34:56 -0400 on Seeking Alpha

Seeking AlphaDividend IdeasPennantPark Investment: 55% Discount To Book Driving 14% YieldSep. 1, 2020 12:34 PM ET|| About: PennantPark Investment (PNNT), PNNTG, Includes: AINV, ARCC, BKCC, CGBD, CSWC, FCRD, FDUS, FDUSG, FDUSL, FDUSZ, FSK, GAIN, GBDC, GSBD, HTGC, MAIN, NEWT, NMFC, NMFX, OCSL, ORCC, PBB, PBC, PFLT, PSEC, SCM, TPVG, WHFby: BDC BuzzBDC Buzz Sustainable DividendsBuild a portfolio with sustainable dividend yields ranging from 8% to 12%SummaryThis is a series of articles discussing retirement portfolios using BDCs currently around 12% and their safer notes - baby bonds/preferred shares with yield-to-maturities ranging from 6% to 10%.
This article discusses PNNTG which is trading 55% below book value/NAV driving a current yield of 13.6% that is easily covered by income.
For higher yield investors this is a much better BDC investment with similar yields.
Also mentioned is its Baby Bond "PNNTG" currently considered a Buy trading at an 8% discount to par with a 7.7% yield-to-maturity over the next four years.
Introduction
This article is part of a series discussing how to build a retirement portfolio using Business Development Companies ("BDCs") currently yielding almost 12% and their safer notes - baby bonds/preferred shares with yield-to-maturities ranging from 6.5% to 10.0%. Please see the end of the article for a list of BDCs that I will be covering over the next two weeks.

Business Development Companies 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. The following slide from Ares Capital (Nasdaq: ARCC) breaks out many of the requirements of the BDC/RIC structure including 70% of assets in U.S. private companies diversified by size and sector.


This article discusses PennantPark Investment (PNNT) currently yielding 13.6% and its Baby Bond that trades under the symbol "PNNTG" with yield-to-maturity between 7% and... 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
PROSPECT CAPITAL 6.71   16.8 0.40 0.72 10.76
APOLLO INVESTMENT 16.78   14.2 1.18 1.80 10.73
FIDUS INVESTMENT 14.84   8.8 1.69 1.56 10.53
WHITEHORSE FINANCE 13.60   7.0 1.94 1.42 10.49
STELLUS CAPITAL INVESTMENT 13.45   8.2 1.65 1.36 10.16
OAKTREE SPECIALTY LENDING 4.90   0.0 -1.39 0.50 10.02
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
ARES CAPITAL 19.19   10.5 1.82 1.60 8.39
NEWTEK BUSINESS SERVICES 22.91   0.0 0.00 2.32 8.09
CAPITAL SOUTHWEST 21.81   12.2 1.78 1.60 7.21
GOLUB CAPITAL BDC 18.55   15.7 1.18 1.28 6.89
GLADSTONE INVESTMENT 12.34   7.4 1.67 0.82 6.73
MAIN STREET CAPITAL 43.18   16.8 2.57 2.46 5.69

BLACKROCK KELSO CAPITAL - BKCC
BLACKROCK KELSO CAPITAL - BKCC  


Older articles featuring Blackrock Kelso Capital (BKCC):
Preliminary Q2 Results For The BDC Sector Currently Yielding 13%
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

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