As a risk-averse income investor, I always approach double-digit yielders with caution. The reason is simple: when most blue-chip companies can’t even pay you four percent, what makes you think that a 10% yield would be sustainable? The blunt reality is that most double-digit yielders are not the safest bets. But that doesn’t mean we should ignore all of them completely, because every once in a while, you may come across a high-yield stock that can actually afford its payout.
Case in point: BlackRock TCP Capital Corp (NASDAQ:TCPC) is a specialty finance company headquartered in Santa Monica, California. The company has a quarterly dividend rate of $0.36 per share, which translates to an annualized payout of $1.44 per share. And since TCPC stock is currently trading at $13.47 per share, it offers an annual dividend yield of 10.7%. No doubt, such a jaw-dropping yield simply seems too good to be true. But like I said, this company is an exception.
Source: Income Investors
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