If you’re on the hunt for high dividend yields, you’ll want to read on. A well-covered small-cap Business Development Company (BDC) has just been added to the Best High Dividend Stocks model portfolio.
Despite economic concerns and a slowdown in investment activity, partly driven by higher interest rates, the BDC has been opportunistic in finding new investment commitments, with the majority being first-lien loans, reflecting its emphasis on being at the top of capital structure. Additionally, the company’s plan on reallocating capital from lower-yielding loans to higher-yielding private credit opportunities reiterates the BDC’s focus on generating attractive returns in the currently uncertain economic environment.
This BDC offers a forward dividend yield of 10.83%, ranking it in the top 20% of dividend-paying stocks. This yield is not only considered high but also closely matches the BDC industry average of 10.8%. It’s essential, however, to be cautious of dividend traps.
Investors seeking dividend growth will also find this addition compelling, as it boasts a 22% three-year compound annual growth rate (CAGR) for dividends per share, which also ranks in the top 20% of all dividend stocks.
As for immediate cash flow, the next payout will be an unchanged $0.550 per share. This payout went ex-dividend on September 14 and will be paid on September 29.
We also take into account the growth drivers and financial results discussed by the company management during their Q3 2023 earnings call held on August 4, 2023.
To understand the recommendation process behind this addition, which optimizes for Yield Attractiveness and Dividend Safety, and to a lesser extent, Returns Potential and Returns Risk, be sure to dive into the in-depth stock analysis that follows.