2 of these picks come directly from my portfolio. Discounts to book value this large have historically been a sign of big gains for new buyers. Large discounts to book value are enabling higher dividend yield as the company’s equity value is much higher than share prices. The company is investing and leveraging the book value, so having more book value makes it easier to generate to net interest income. I'm actually going to say something nice about a BDC I've rarely praised. Prices are as of the July 4th weekend.
Prospect Capital (PSEC) is one of the higher-risk BDCs in our view, but it is cheap enough to be attractive. Shares trade at a price-to-NAV ratio of about .67 and a dividend yield of 10.3%. SLR Investment Corp. (SLRC) trades at a higher ratio, about .79 using our estimates. However, it carries a 10.9% dividend yield, and we find shares quite attractive at this valuation.MFA Financial (MFA) also gets a quick reference. Due to MFA trading at such a large discount to projected NAV, shares carry a 15.8% dividend yield.
Source: Seeking Alpha
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