There’s no other way to put it: the U.S. stock market is bloated. Over the past 12 months, all three major indices have soared past their all-time highs. Consider this: the S&P 500 Index now carries a price-to-earnings multiple of 25.84 times, significantly higher than its historical average of 15.68 times. While the latest round of rally has certainly brought many profit-taking opportunities, it also created a challenging environment for yield-seeking investors. Because a company’s dividend yield moves inversely to its share price, the surging stock market means yields are getting suppressed.
And that’s why Medley Capital Corp (NYSE:MCC) is special. The company not only offers a jaw-dropping yield of 11.32%, but also trades at a significant discount. Headquartered in New York City, Medley Capital Corp is a closed-end investment firm that specializes in lending to privately held middle-market companies in North America. Middle-market companies may not be household names, but they represent a huge income opportunity. You see, previously, banks dominated the lending space. But due to consolidation in the banking industry and tighter regulations, banks’ participation in middle-market lending has declined significantly in recent years. This allowed investment firms like Medley Capital Corp to take the main stage in the business.
Source: Income Investors
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