Dividends4Life: Can This 7% Yield Possibly Be Safe?

Can This 7% Yield Possibly Be Safe?

Posted by D4L | Saturday, February 10, 2018 | | 0 comments »

Over the past decade, few businesses have paid out higher yields than business development corporations (BDCs). Big banks have turned their back on small-town America. With all of the new regulations, bankers only want to lend to their largest customers. That’s good news for BDCs, as these firms have rushed in to close the gap left in the marketplace. And with little in the way of competition, lenders have earned themselves outsized profits.

One such example is Main Street Capital Corporation (NYSE:MAIN). The company has craved out a lucrative niche, offering customized loans to mid-sized businesses. Income investors have also taken notice, given shares pay out a dividend yield over seven percent. Of course, eyebrows go up any time you see such a big distribution. So can Main Street Capital maintain such a generous dividend? Let’s dig into the financials. This payout looks reasonably safe, first off.

Source: Income Investors

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