There is an enormous opportunity in lending to middle-market companies right now, and business development companies (just BDCs for short) are perfectly positioned to benefit. BDCs were created by an amendment to the Investment Company Act of 1940 and specialize in providing funding sources for small- and middle-market companies. Where this gets interesting to anyone playing the market is that to avoid taxation, BDCs must pass along at least 90% of their taxable income to investors. Thus, they’re another way to get your dividends.
As banks have stepped away from riskier lending in the aftermath of the credit crisis, BDCs have stepped up and filled the void. It is a huge opportunity and provides income seeking investors an opportunity to join the big private equity funds in profiting from the situation. My favorite BDC for individual investors is Apollo Investment Management (AINV). Fifth Street Finance (FSC) is a BDC that lends to and invests in small- and mid-sized companies in connection with an investment by private equity sponsors. KCAP Financial (KCAP) invests in companies with between $7.5 million and $50 million of EBITDA.
Source: InvestorPlace
Related Articles:
- First Quarter 2014: Top And Bottom Performing Dividend Stocks
- Don't Touch These 5 Dividend Stocks!
- 7 Dividend Stocks Headed In The Right Direction
- Who Owns The Top Dividend Stocks?
- 6 Big-Name Dividend Stocks Crushing The S&P 500
________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
It’s no secret that most investors who buy high-yield stocks are looking for income. But every once in a while, yield hunters may come acros...
-
Showing resilience during a tough week was a group of stocks that has not been heard from much in the past two years. A group that has been ...
-
Dividend-paying securities are the major sources of consistent income when returns from the equity market are at risk. Why Growth-Focused Di...
-
Not all stocks that pay high dividends are too good to be true. In fact, some stocks with high yields have lots of room to grow, or they tra...
-
After an abysmal 2018, real estate investment trusts (REITs) have been on a roll this year. After pulling one of the worst performances sinc...
-
Most investors near the end of their working years are wise enough to avoid risky marijuana stocks. Unfortunately, recognizing relatively sa...
-
Buying and holding high-quality dividend stocks is arguably the best way for investors to predictably achieve outsized returns over the long...
-
There are some dividend aristocrats which have not only maintained but increased their dividends for over half a century. Having survived ev...
-
The past few years, I’ve urged readers to study a little-followed group of businesses I consider “cash cows.” Large investors generally igno...
-
Apple (NASDAQ:AAPL) started up its current dividend program back in 2012 after years of refusing to give back even a single cent to its shar...
0 comments
Post a Comment
Post a Comment