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I Bought Fidus Investment: 12% Yield And 35% Below Book

Published Sun, 04 Oct 2020 08:00:00 -0400 on Seeking Alpha

Seeking AlphaDividend IdeasI Bought Fidus Investment: 12% Yield And 35% Below BookOct. 4, 2020 8:00 AM ET|| About: Fidus Investment (FDUS), FDUSG, FDUSL, FDUSZ, Includes: AINV, ARCC, CGBD, CSWC, CSWCL, FSK, GAIN, GBDC, GLAD, GSBD, HCXY, HCXZ, HTGC, MAIN, NMFC, OCSL, PNNT, PNNTG, PSEC, TCPC, TPVG, TSLXby: BDC BuzzBDC Buzz Sustainable DividendsBuild a portfolio with sustainable dividend yields ranging from 8% to 12%SummaryI recently started a position in FDUS as I believe that there's a good chance for a total return potential of 30% or higher over the next 12 months.
FDUS is currently trading at a 35% discount to book value, driving a current annual dividend yield of 12%.
There's also the possibility for additional special dividends.
This is part of a series of articles discussing retirement portfolios using BDCs currently yielding around 12% and their safer notes - baby bonds/preferred shares with yield-to-maturities ranging from 6% to 10%.

Introduction
This article is part of a series discussing how to build a retirement portfolio using business development companies ("BDCs") currently yielding over 12% and their safer notes - baby bonds/preferred shares with yield-to-maturities ranging from 6.5% to 10.0%. The previous article discussed Golub Capital (GBDC) which is a lower yielding BDC that typically implies a "safer" portfolio and/or sustainable dividend coverage.
Active Insider Buying At Golub Capital Yielding 8.8%
BDC Buzz Starts a Position in FDUS
I recently started a position in Fidus Investment (FDUS) because I believe that there's a good chance for a total return potential of 30% or higher over the next 12 months as discussed at the end of the article. My subscribers are well aware that I often wait for stocks to have a relative strength index of ("RSI") of close to 30 before buying. This is the definition from Investopedia:
The relative strength index (RSI) is a momentum indicator developed by noted technical analyst... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
PENNANTPARK INVESTMENT 6.32   21.8 0.29 0.72 11.32
PROSPECT CAPITAL 6.71   16.8 0.40 0.72 10.76
APOLLO INVESTMENT 16.78   14.2 1.18 1.80 10.73
TCP CAPITAL 13.75   29.3 0.47 1.44 10.48
OAKTREE SPECIALTY LENDING 4.90   0.0 -1.39 0.50 10.02
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
GLADSTONE CAPITAL 9.50   63.3 0.15 0.84 8.84
ARES CAPITAL 19.19   10.5 1.82 1.60 8.39
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

PENNANTPARK INVESTMENT - PNNT
PENNANTPARK INVESTMENT - PNNT  


Older articles featuring Pennantpark Investment (PNNT):
Reader Favorites And Rogues 9/9 To 10/8 Show 35 Dividend Dogs Ready To Adopt
BDC Retirement Income: 12% Yielding New Mountain Finance
Preliminary Q2 Results For The BDC Sector Currently Yielding 13%
8% To 10% Balanced Portfolio Yield Investing In America: Part 2
Earn An 8% To 10% Balanced Portfolio Yield Investing In America: Part 1
TCG: Why I Bought Carlyle Group's BDC Currently Yielding 21%
BDCs Continue To Affirm Dividends: Capital Southwest At 15%
Picking Winners And Losers In The 18% Yielding BDC Sector
High Yield: Owning BDCs During The Crisis
Quick BDC Market Update: 18% Average Yield But Continued Volatility

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