by Fred Fuld III
If you have not heard of BDCs, they may6 be worth a look. BDC stands for Business Development Company.
BDCs are closed-end investment funds that invest in small and mid-sized businesses, either through equity investments, debt, or both.
They avoid double taxation, similar to REITs, as long as at least 90% of earnings are distributed to shareholders. There is no taxation at the corporate level.
Many income investors like to invest in BDCs for their income, with dividend yields as high as 11%.
One example of a high income BDC is Ares Capital (ARCC), a Los Angeles based company that offers a yield of 8.8%. This BDC has a market cap of $10 billion and pays its dividend quarterly.
Another high yield BDC is Golub Capital BDC (GBDC), which pays a yield of 8.76%. It also has a quarterly dividend payment schedule. This New York City based company has a market cap of $2.4 billion.
There are actually ten BDCs that yield over 8%, with one yielding 11%. In addition, three of the stocks pay dividends monthly.
The entire list of 10 BDC stocks paying over 8% will be emailed to all subscribers this weekend, on Saturday, August 13, 2022. If you are not a subscriber, you can sign up at the signup box below. Don’t miss out. Remember, it’s free!
Of course, there is aways risk, especially since the BDCs invest in smaller companies.
Don’t forget to check out:
Stocks going ex-dividend in August
Disclosure: Author didn’t own any of the above at the time the article was written.