If a company pays, say, 14%, you would only need to put up $71,429 to earn $10,000 in annual dividends. Of course, we know that double-digit yielders are not exactly the safest bets. As a conservative income investor, I’d rather have a diversified S&P 500 portfolio than put all my money in an ultra-high-yielding stock. Still, because of their generosity, ultra-high-dividend stocks could serve as yield-boosters in a well-diversified portfolio.
And that’s why I’m looking at CM Finance Inc (NASDAQ:CMFN) today. CM Finance is a business development company (BDC) headquartered in New York City. Like most BDCs, the company provides financing solutions to middle-market businesses. While CM Finance makes both debt and equity investments, its primary focus has been senior secured lending. As of September 30, 2018, 61.5% of the company’s portfolio consisted of first-lien loans, while another 34.7% of the portfolio consisted of second-lien loans.
Source: Income Investors
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- Free Cash Flow Payout vs. Dividend Payout
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