Welcome to Dividend.com. Please help us personalize your experience.

Select the one that best describes you

Your personalized experience is almost ready.

Join other Individual Investors receiving FREE personalized market updates and research. Join other Institutional Investors receiving FREE personalized market updates and research. Join other Financial Advisors receiving FREE personalized market updates and research.

Thank you!

Check your email and confirm your subscription to complete your personalized experience.

Thank you for your submission, we hope you enjoy your experience


Best Dividend Stocks
Ex-Dividend Dates
High Yield Stocks
Screener
Strategies
Tools
Articles
Premium
Advisors

Yield printed on a sign

News

Time To Take A BDC Chance?

Evan Cooper Dec 09, 2015


Business development companies, like other closed-end funds, are one of those quirky corners of the investment world that are poorly understood and often overlooked, yet provide high yields.

In the case of business development companies (BDCs), the reason for the high yields is that the entities pay little or no income tax if they pay out at least 90% of their taxable income to investors in the form of dividends—in that way, they are much like real estate investment trusts. The purpose of BDCs, however, and the reason they were given their preferential tax status, is to encourage investments in small- and medium-sized businesses that might otherwise not have access to capital.

Each of the more than dozen or so publicly traded BDCs invests in slightly different ways—making loans to smaller businesses or taking equity stakes in them, doing a combination of both, or entering into more esoteric financial dealings.

To read the Full Story, Go Premium or Log in

Popular Articles