Dividends4Life: 3 Contrarian Buys for the Dividends

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3 Contrarian Buys for the Dividends

Posted by D4L | Tuesday, October 07, 2014 | | 0 comments »

The common thought is that when interest rates rise, we will see high-yield investments like business development companies sell off as rising rates raise their borrowing costs and reduce the value of their current holdings. This idea is accepted as common knowledge, but someone apparently forgot to tell the people managing these firms.

Officers and directors of many of the leading BDCs believe that either rates will not rise, or that rising rates just won’t hurt them. They have been cracking open their checkbooks and buying shares of their firms in the open market on a pretty regular basis over the past few months, even as the eventual end to zero-percent interest rates begins to appear in the distance. Here are three BDCs that contrarian income investors should consider for their big dividends: Apollo Investment (AINV), Prospect Capital (PSEC) and Ares Capital (ARCC).

Source: InvestorPlace

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